Audio version

33

LIFE

October/November 2012 www.esb.ie/em

QUICK TIPS FOR YOUR PERSONAL FINANCE

Finding the right home for your cash

BARRY MCCALL

PERSONAL FINANCE

THERE IS some marvellous value to be had from fixed term savings accounts at the moment. At a time when the ECB base rate is below 1% and standard demand deposit rates are offering returns barely above zero before DIRT at 30% is taken away annual rates of 4% and more are not to be sniffed at.

But there is no such thing as a free lunch when it comes to such high rates of return. The higher the rate the more strings are usually attached in terms of the amount you must save, the length of time you have to lock it away for, and the penalties should you break any of the terms. It is therefore always best to stand back and think for a while before making any rash commitments.

Like so much else in the financial arena the best way to approach these things is systematically and to break down the various offers into their pros and cons. A fixed savings product is made up of four basic elements – the interest rate, the term, the minimum balance, and access. Some of them may have loyalty type bonuses added at the end but these things should not be front of mind when choosing an account.

First off is the interest rate. The rate is expressed as an Annual Equivalent Rate (AER) and this allows you to compare rates between different products on an equal footing. Another rate to pay attention to is the gross return. This tells you the overall percentage return you can expect to get for your money at the end of the term of the savings plan. So, if you put in €5,000 into a product offering a 15% gross return after five years you can expect total interest of €750 at the end of that term. DIRT will be deducted at source from this amount of course.

After that comes the term and higher rates usually come with longer terms. But locking your money away for a long time is not necessarily a good idea. You may need to get your hands on it to replace a car or for any other of a whole host of reasons.

Then comes the minimum balance and the best rates usually mean the highest balances. But again, it may not be the wisest course of action to put all your money into one product and possibly not be able to touch it for several years. If this is a concern you might do better looking at a few different products with lower thresholds. And there are several products on the market with quite attractive rates with minimum balances of as little as €1,000.

Finally there is access. Some products offer some limited access to your funds but usually at a cost in terms of a slightly lower interest rate. But this can be worthwhile if you want the comfort of being able to get hold of at least some of your money in an emergency.

These are the four things to look at in any product and if any of them don’t seem to work for you look elsewhere. When you think about it, 1% additional interest on £5,000 over five years may sound very good but it is worth less than €180 after DIRT and you have to ask if it is really worth locking in your money for all that time for that.

Audi A4 Avant 2.0 TDI 177 bhp

DAVE WALSHE

MOTORING

AUDIS ARE THE NEW BMWs, which themselves were the new Mercs. Of this three, Audi is the only manufacturer selling more cars in 2012 than it did in 2002. In the current climes, that’s very impressive and says a lot about the quality and desirability of the cars it is offering.

In some circles, the A4 is the ‘must have’ car, whereas the A6 is seen as an ‘I want’ car. There is something very appealing about Audis. They stand for engineering excellence but in an understated way. It says the buyer is discerning rather than just following the herd. Not that following the herd, in this company, is a bad thing.

My test vehicle was the new Audi A4 Avant, 2.0 TDI 177 BHP, with a six-speed manual gearbox. I like he Avant’s shape and this sleek version, from a practical and visual perspective, is a winner. I apologise for the overused and abused word ‘sleek’, but here, in relation to the Avant, it’s warranted.

The LED display, day or night, is impressive and accentuates the classy look. Audi has mastered a look across it entire range that says ‘premium’ and others envy it.

The driving dynamics of the A4 are superb. It is so solid on the road, even in this 2wd version and not the legendary 4wd Quattro that Audi are famed for. Corners are welcome and enjoyable. I took this car over the Dublin/Wickow Mountains and the goats I encountered were jealous of its surefootedness. On the motorway, the silence is amazing and any long trip will see you arrive sans any aches or tiredness. There is ample power from the diesel engine and, because this is one of the smaller Audis, it feels a lot more potent.

Passengers are cosseted and the ambiance in the A4 is imbued with an overall sense of quality. Audi is still winning the best interior battle and it’s easy to see why when you sit inside. It seems to find new and better plastics well before any other manufacturer. The consistency across the Audi range is reassuring and you see items in their most expensive cars present on Audi’s least expensive models. Its radio volume control is still the best design and control method on the market.

I took the time to try out the various seating configurations. To achieve the desired configuration was effortless and above all intuitive - the search through the owner’s manual was unnecessary, phew! The space available is enormous and access is great.

The base model price for this car is €41,940, rising to €50,868 for the extras. The cheapest Avant starts at €35,970. The extras include SatNav, Xenon lights, metallic paint and sports seats. The pricing doesn’t seem to have fazed a lot of buyers, as demonstrated by the burgeoning sales figures. In an age of cut-throat, cut-price cutbacks, it reassuring that quality still wins out and that quality label sits very nicely with the Audi brand and the A4 Avant.

Quicker access to your money

SIMON DUNNE

ST. PATRICK’S CREDIT UNION (ESB STAFF) LTD.

ST PATRICK’S CREDIT Union is delighted to announce the introduction of an electronic funds transfer (EFT) service for our members. EFT is a way for the credit union to electronically transfer money from your shares/budget/loan accounts to your bank account. This is, obviously, a much safer, secure and more efficient way of sending money to our members and will also mean members will have quicker access to it – now, within two working days!

In order for members to avail of this new service, we will need to hold on file a fully completed and signed mandate, where the member authorises the credit union to electronically transfer funds to a designated bank account. This mandate can be downloaded from our website www.stpatricscu.ie and members can then complete and send it in to the credit union office (original forms only can be accepted – scanned or faxed copies are not acceptable).

Once the mandate is held on file, the member can select the EFT option when completing future share withdrawal forms/budget withdrawal forms/loan application forms, thereby having quicker and safer access to their funds.

Please note that members will still currently be able to request payment by cheque, which can be collected at the credit union office or sent to the member’s home or work address; but be advised that it can take up to three to five working days for some banks to clear the cheques – no such problem with EFT.

Please see our website www.stpatrickscu.ie for further details and or to download the mandate form. Otherwise, call the office on 01-6325100 where a member of staff will be happy to help you.

Please contact Simon Dunne on 01-6325125 if you have any questions.

St Patrick’s Credit Union Competition

Win an iPod nano!!

To be in with a chance of winning please answer the following question and text your answer to 087 9858238 in the following format:

“CUCOMP followed by your answer (i.e. a, b or c) and your name”

How quickly can members have access to their funds with EFT?

a) Within two working days b) Within three working days c) Within tour working days

Important Only one entry per person, no mail entries acceptable, and the closing date is the 30th November 2012.

Last issue’s winner was Mary Finnerty, working in Sean Mulvoy Road, Galway. Congratulations Mary and your iPod nano is on the way out to you.