About savings
What’s the best way to build your savings?
The best way to build your savings is to start. Open a savings account and make sure you know how much you can afford to save regularly. Use our budget tool to help you calculate what you can afford to save. Saving helps you prepare for unexpected costs and can save you money by reducing the need to borrow. In many cases, paying off debts first makes financial sense, especially if the interest rate on your loan is higher than the interest you earn on savings.
There are many ways to save, including deposit accounts, state savings schemes, and credit union accounts. You can review the money you will earn in interest and the time you have to save for with the CCPC savings account comparison tools. Check if your savings are protected by the Deposit Guarantee Scheme and learn about options like State Savings, An Post and credit unions through the Irish League of Credit Unions.
Smart ways to manage your savings
Saving is important. It allows you to build a fund for unplanned costs, and by saving for big purchases instead of borrowing, you can avoid paying interest. Building a regular savings habit can also help if you’re thinking about applying for a mortgage by showing lenders you manage your money well and helping you build up your deposit.
Before you start saving, decide how much you can afford to put aside each week or month, and for how long. To do this, look at your income, monthly spending and any outstanding loans. CCPC budgeting resources help you find out how much you have left to save or invest. Once you know your budget, you can start your savings plan.
How much should you save each month?
Use CCPC budgeting resources to find out what you can afford after covering your essential expenses.
What is DIRT tax and who pays it?
Deposit Interest Retention Tax (DIRT) is a tax on interest earned from savings. Most people pay DIRT, but some are exempt. Go to Revenue’s DIRT exemption criteria.
Are your savings protected?
Savings in authorised Irish banks, building societies, and credit unions are protected up to €100,000 per person by the Deposit Guarantee Scheme.
Can you open a savings account in another EU country?
Yes, but check deposit protection, tax rules, fees and access before opening an account. Visit saving in other EU countries for more information.
Should you clear your debts before saving?
Paying extra off outstanding loans or clearing your credit card balance will save you money. If the interest rate on your loan is higher than the rate you earn on savings, it often makes sense to clear debts first.
What are your options for saving?
There are several ways to save, each with different features and benefits.
Deposit accounts
Deposit accounts pay interest on your savings. Some offer higher rates than others, so use the CCPC Lump sum deposit tool to shop around.
- The annual equivalent rate (AER) or compound annual rate (CAR) helps you compare accounts. The higher the rate, the more interest you earn.
- Higher rates may mean less access to your money.
Fixed and variable interest rates
Interest rates on savings accounts can be fixed or variable.
- Fixed interest rates stay the same for a set time, so you know your return. You won’t benefit from rate rises, but you’re protected if rates fall.
- Variable interest rates can rise or fall. If rates fall, you earn less interest; if they rise, you earn more.
You must pay DIRT tax on the interest you make unless you are exempt. More information can be found on the Revenue website.
State savings schemes
The National Treasury Management Agency (NTMA) offers savings products at Statesavings.ie or through An Post branches, including:
- Deposit accounts
- Regular monthly savings accounts
- Fixed rate/term products such as savings certificates and savings bonds
For more details go to Statesavings.ie or visit any post office.
Credit union accounts
Credit Unions are community-based organisations offering savings and loans to members. To join, you must fall within a ‘common bond’:
- Live or work in a particular area
- Be employed by a company with a credit union
- Be a member of a professional body with its own credit union
You can get more information on credit union membership from the Irish League of Credit Unions and the Credit Union Development Association (CUDA). Most credit union accounts allow you to withdraw money on demand, but you may need to keep a minimum balance if you have a loan with the credit union.
Credit unions usually pay a yearly dividend, not interest. The rate depends on profits and is not guaranteed. DIRT tax applies unless you are exempt.
What are the different ways you can access your savings?
Savings accounts offer different levels of access to your money.
- Demand account: Variable interest rate, withdraw money immediately
- Notice account: Variable interest rate, but you must give notice to withdraw. In return, you get a better rate
- Fixed-term deposit account: Fixed interest rate for a set period (e.g. one or two years). Early withdrawal usually means less interest
Can you save in other EU countries?
As a European Union (EU) resident, you can shop around for banks/financial providers in other EU countries. There are a number of different websites and platforms available that allow you to compare the interest rates and terms of savings accounts available.
However, be warned, as appealing as some interest rates may seem, it is important to find out some key information, such as deposit protection, tax implications, fees and access rules before opening an account. Learn more about saving your money in another EU country.
What is the Deposit Guarantee Scheme?
The Deposit Guarantee Scheme (DGS) protects depositors if a bank, building society, or credit union authorised by the Central Bank of Ireland cannot repay deposits. The scheme is administered by the Central Bank and funded by covered institutions. The DGS protects:
- Depositors at authorised banks, building societies, and credit unions
- Eligible deposits up to €100,000 per person per institution
- Current accounts, deposit accounts and share accounts
Where can you find more help with saving and investing?
We brought the Money Clinic around Ireland. You asked the questions, and financial planner and TV presenter Eoin McGee has the answers.
