Inspired by Eoin O’Connor @the_mortgage.guy’s Thursday Tip, it’s a great common question about where is best to save your deposit when saving to buy a house. There’s 3 important issues to consider when choosing a savings account:
- Where will I keep it safe?
- Where will it earn me something?
- Will your bank be able able to see my savings clearly?
You need somewhere safe (not cash under the mattress) that you can easily deposit it but preferably somewhere you won’t be tempted to touch it! Many people are using Revolut these days, which is super convenient and smart way to save small amounts in different Vaults. But it’s just as easy to take money out again. And also the banks prefer to see a clear 6 months saving from a bank or Credit Union account.
A second dedicated savings account with your bank is probably the first choice. Or a joint account for a couple. The Credit Union is good too and will build you a good repayment record for future refurbishment loans.
However none of these accounts will earn you interest. If you are planning to save longer term, a fixed term savings account or an investment vehicle could be an option. These have the added benefit of not being able to be touched or withdrawn early.
As always, seek professional financial advice from a QFA.
If you want more savings advice and a great place to track your deposit savings in our Deposit Builder, buy the Irish Home Buyer’s Journal at: https://www.irishhome.ie/journal