If you’re a company director (business owner), with surplus cash sitting in Irish bank deposits, then now is a great time to consider higher-rate, deposit alternatives. By accessing leading banks outside of Ireland, you can achieve much higher returns without risk.
Putting money in Irish bank deposits is all very well, especially if interest rates are high and inflation is low, but that’s simply not the case right now, and even when inflation eventually lowers, so too will the best Irish bank deposit rates.
So, for those company owners seeking guaranteed returns, now is the time to examine Structured Deposits.
Structured Company Deposits
To beat the rates from Irish retail banks, One Quote Financial Brokers are now offering superior guaranteed deposit rates for company monies, through Structured Deposits. These are life company investment bonds that offer fixed deposit rates, but from European banks:
- Fixed deposit terms are available for 3-5 years.
- The minimum deposit is €100,000.
- The upper limit is €3M.
Company cash deposit rates
These deposit rates are fixed once locked in and both your capital and rate of return are guaranteed, provided you don’t access the money prior to the end of your chosen deposit term (3-5 years).
The best 3yr rate is currently with Barclays:
- 3 years: (3.75% CAR) 11.68%
Whereas, using the same structured product, the best 4 and 5-year rates are currently made available through Société Générale:
- 4 years: (3.78% CAR) 16.00%
- 5 years: (3.91% CAR) 21.14%
Note:
- Quoted rates are available until 30th November 2023.
What about taxation?
Company-based deposits don’t pay 33% D.I.R.T like personal deposits, but a lower rate of 25% tax on gains. Structure deposits also pay this lower rate, but also benefit from gross roll-up, as the tax is only applied on exit.
Steering clear of the close company surcharge
Most companies in Ireland are small companies. That is, they are controlled by five or fewer shareholders, or by shareholder-directors.
If that’s the case for your business, investment income (including deposit interest) is normally subject to the close company surcharge. The close company surcharge is an additional 20% tax on investment income, if it is not paid out to shareholders within 18 months of the end of the accounting period in which it arose.
But if the investment is held as a “Structured Product”, it’s exempt from the close company surcharge.
Avoiding the 1% government levy
Because a Structured Deposit is an effect of a life insurance investment bond product, offering superior term deposit rates, the original investment is normally subject to a 1% Government Levy. The good news, however, is that we cover this cost.
Are there any charges?
Yes, there is an annual product charge, as this involves the combination of a number of parties in formulating the product offering. These charges are fixed and fully transparent and may range from 0.60% PA to a maximum of 1.00% PA, with lower charges applied to higher deposit amounts. They are also deducted in full at set-up, so your investible balance benefits from the full fixed deposit rate free, from taxation until the time of exit.
In conclusion
If you’re a company with surplus cash in your company bank account, or sitting in a low-interest deposit account, Structured Deposits offer a more attractive and smarter alternative.
Free Consultation
Contact: Ken O’Gorman – Director – QFA, SIA, MCIBS – Investment Specialist
One Quote Financial Brokers on 01 845 0049 or email: ken@onequote.ie
