Choosing the best value savings account for a lump sum investment could be the difference between hundreds of euro worth of interest each year, according to a new survey by the Irish Financial Services Regulatory Authority.
In fact, on a €10,000 lump sum investment, choosing the wrong account could cost as much as €475 in lost interest.
With the last batch of special savings incentive accounts (SSIAs) maturing this week, this could prove costly for anyone who doesn't do their research properly.
The regulator's survey outlines the best and worst offers available to anyone seeking to buy a new home with their savings rather than spending them on a new car or a holiday.
According to the regulator, the first thing to consider before locking your money away is whether you need immediate access to your savings, or if you are happy to provide at least a month's notice before accessing your funds.
In general, the longer you are prepared to leave money locked away, the higher the interest rate offered. However, increased competition in the banking sector has led to a number of good offers.
According to the survey, the best option for anyone looking to put away €10,000 but seeking instant access to their money is RaboDirect, which is offering an online interest rate of 5 per cent.
This compares with as little as 0.25 per cent being offered by An Post. (The postal service is however due to launch a savings product tomorrow through its new banking venture, Postbank.)
Northern Rock is also offering an online rate of 4.3 per cent, but for anyone averse to internet banking, your best bet is National Irish Bank (NIB), which is offering 4.25 per cent.
Only one such account is allowed per customer however.
If you are happy to provide one month's notice before accessing funds, then Anglo Irish Bank has the best offering at 4.25 per cent, while for a fixed-term 12-month investment, 4.5 per cent interest can be earned on an account at Northern Rock.
If you are lucky enough to have €20,000 to put away in one go, then again, RaboDirect is the best option, though it is important to note that the 4.375 per cent rate only applies to the first €10,000 of your savings, with a rate of 3.75 per cent coming into force after that and up to €1 million.
For non-internet based accounts, NIB again comes in top at 4.25 per cent, while Northern Rock has an internet account offering 4.25 per cent without the rate reduction over €10,000.
For a longer-term investment, 4 per cent can be earned in a one-month notice account at Irish Nationwide, while Northern Rock is offering 4.5 per cent for a 12-month fixed-term account.
