‘Keeping the powder dry’: why the Irish leave their money on deposit

We’re richer than ever before – new research from the Central Bank of Ireland shows that Irish wealth has reached a new high of €724,000 per household.

And yet, we remain reluctant to put this wealth to work for us by investing. We still have staggering amounts on deposit earning next to nothing, while figures from the Central Bank show our disinclination to put it to work in the markets.

This will cost us – a wealth report from Davy last year found evidence “of an overly conservative and/or passive management of Irish household financial assets”. By keeping so much money on overnight deposit, earning next to nothing, we are “systematically foregoing risk-free returns”, Davy found. Indeed, “the reality is that we could have achieved more in wealth terms in the past decade with a concerted effort,” the report found.

But there is an appetite to do more with our money: of those investing, about 32 per cent have only started in the past two years, according to the Central Bank, while the Government has big plans for its proposed tax-free savings/investment product aimed at boosting participation.

So, it’s a good time to familiarise yourself with dipping a toe in the markets. Over the space of eight weeks, we are going to guide you through how you can start investing, from stocks to bonds and investment funds to crypto.

But first, why are Irish people so loath to invest? What are the risks of leaving your money on deposit?