Investment FAQs

How much risk should I take on?

You need to consider your investment term (as above). What are you hoping to achieve with your fund? Is there a required rate of return needed for this? What is the risk-return trade off? Are you making this decision with your spouse/civil partner who might have different views to your own?

A Financial Broker regularly deals with these elements when deciding on appropriate risk and they can guide you in determining your risk profile.

What is the recommended minimum savings and investment term of the product?

Some products may be suitable for short-term investment, while others may require you to take a longer-term view.

What kind of access will I have to my money?

Some products offer immediate access while others may lock up your money for a particular period.

Does this product provide an income or capital growth?

Some products may be geared to provide regular income along the way, while others provide the opportunity for capital growth.

What is the associated investment risk?

Some products may guarantee to return your full investment while others may involve a risk of getting back less than you put in.

How will my returns be taxed?

EXIT Tax
This is the most straightforward taxation method; it’s a flat 41% tax on any gains within an Investment Bond; administered by the Provider. It does not discriminate; regardless of your personal tax position or any losses you incurred in previous investment bonds; this rate is levied on encashment or each 8th year anniversary of the policy while it is in force. This does mean that your fund can grow without it being reduced by tax during this 8-year period.
HOWEVER corporate savings plans, or investments have a reduced liability of 25%!

Deposit Interest Retention Tax (DIRT)
This tax has been reducing over the last few successive budgets; now in 2019 it stands at 33%. Some would argue that with deposit rates so low; that this tax is vastly irrelevant to most of us as we are earning so little anyway. This Tax charge can make a difference if you are investing in a Capital Secure product that earns a return over the term; if you are lucky enough to be DIRT exempt; you can earn gains tax free.

Capital Gains Tax
This tax rate is 33%, however everyone has an annual allowance of €1,270 which means; any gains that they may receive up to €1,270 are tax free. This is a handy allowance and shouldn’t be ignored. With CGT; you can offset previous losses against future gains; again, this can be very useful for anyone who may have incurred losses on property or assets in the past.

Information correct as at 25/01/2022