In Ireland, many people are finally starting to build better financial habits after years of uncertainty. One of the simplest and most effective ways to grow your wealth over time is to commit to a regular savings policy. Whether your goal is a future house deposit, funding your children’s education, or simply building a nest egg for peace of mind, setting up a structured savings plan can make a huge difference.
Below, we explore why regular savings are so powerful, why leaving money on deposit isn’t the answer, and how talking to MCG can help you put the right strategy in place.
The Benefits of Regular Savings
The greatest advantage of regular saving is that it helps you build wealth consistently over time. By committing a fixed amount each month – whether that’s €100, €250, or €500 – you create discipline in your finances. You don’t need to worry about “timing the market” or waiting for the perfect moment to start. Instead, you allow the power of regular contributions and compounding growth to work in your favour.
Other benefits include:
- Affordability – Breaking savings into monthly amounts makes it manageable. Most people can budget for a set amount once it becomes part of their routine.
- Flexibility – Regular savings policies can often be adjusted as your circumstances change. You can increase contributions when times are good or reduce them if needed.
- Time in the market – By drip-feeding your money in, you benefit from euro-cost averaging, which smooths out the ups and downs of investment markets.
- Peace of mind – Knowing you have a plan in place provides confidence that you are making progress towards your goals.
Why Leaving Money on Deposit Isn’t the Answer
In Ireland today, deposit rates remain at historically low levels. Even after recent increases in interest rates, the average saver earns a fraction of one percent with the main banks. Unfortunately, inflation is running far higher. This means that while your money might feel “safe” in the bank, in real terms it is losing value every year.
To illustrate: if inflation is 4% and your deposit rate is 0.25%, the purchasing power of your savings is shrinking by almost 3.75% annually. Over five years, that erodes a significant chunk of your hard-earned money.
What About Digital Vaults and Online Banks?
Many people are attracted to the slick apps and digital “vaults” offered by online banks and fintech providers. These platforms make saving easy and often allow you to set goals, round up spare change, or lock away funds temporarily. While the digital experience can feel rewarding, the reality is the same – the interest paid is minimal and still won’t keep pace with inflation.
These tools may help you build the habit of saving, but they are not a long-term solution for growing your wealth. If you’re saving for something important within the next 5–10 years, you may need to consider more than just a pretty interface.
Considering a Medium-Term Approach (5–10 Years)
If your goal is five to ten years away – perhaps saving for a house deposit, helping your child through college, or funding a special life event – then it may make sense to look beyond deposit accounts.
With a medium-term timeframe, you can afford to accept a bit more investment risk in pursuit of better returns. Equities, bonds, or diversified investment funds have historically delivered stronger growth than deposits, especially over periods of 5+ years. While there will be some ups and downs along the way, staying the course could mean your savings pot grows much faster.
For example, putting €300 per month into a deposit account at 0.25% interest will hardly move the dial over a decade. By contrast, investing the same amount into a balanced fund with an average annual return of 5% could build a pot of almost €47,000 over ten years – compared to €36,200 saved in cash.
That’s a difference of nearly €11,000, which could go a long way towards your deposit or education costs.
Why Speak to MCG?
This is where professional advice makes all the difference. We can:
- Understand your goals – Are you saving for short-term security, a medium-term milestone, or long-term retirement planning?
- Assess your risk profile – Everyone has a different comfort level with investment risk. An adviser will help you find the right balance between safety and growth.
- Tailor your plan – There is no one-size-fits-all approach. A good adviser will structure your regular savings policy to suit your personal circumstances.
- Keep you on track – Life changes, markets fluctuate, and sometimes we get nervous. Having an adviser alongside you ensures you stick to the plan and make adjustments when needed.
Too often, people either stick with the “safety” of deposits or dive into investment apps without understanding the risks. An independent adviser can bridge that gap, ensuring your money is working as hard as possible without exposing you to unnecessary stress.
