Bank location is a consideration. How far do you have to travel to a particular bank to get access to your savings? Do the opening hours of the bank suit you? Can the savings be accessed online instead? Investments in shares can be sold easily if bought on the stock market. Investment in property or other assets can take months to find a seller and get your money back. Investments in life assurance policies can sometimes be cashed in early but usually at a high financial cost.
(e) What is the risk? Savings and investments can differ significantly in terms of the risk to your money. You will need to know how safe your money will be. If it is a savings account, are your savings guaranteed to be repaid to you? Some savings schemes guarantee a minimum rate of interest. Others guarantee that you will not lose any of your investment. Some savings are covered by the Central Bank’s Deposit Guarantee Scheme, while others, such as An Post products, come with a full and unlimited State guarantee. If you buy property or an insurance endowment policy you may lose some of your money. If you buy shares you could potentially lose all of your money.
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Investment Tip When you buy Lotto tickets you are simply playing a game of chance. Don’t buy Lotto tickets or scratch cards and think they are an investment. The odds of winning are tiny and you are guaranteed nothing. If you do win, you are just very, very lucky.
(f) How ethical is my choice? There have been many scandals concerning banks that have behaved unethically by overcharging customers on fees and by over-lending to customers. These problems are most common with financial institutions that operate as for-profit businesses. Smart customers should look at the ethical reputation of a financial institution before deciding where to save or invest their money.
