Savers invest just €80m in the State solidarity bond
Published 04/07/2010 | 05:00
The Government's National Solidarity Bond had attracted only €80m from small savers by the close of business on Friday. According to sources at the NTMA, which is managing the bond, about 3,500 customers had invested an average of €23,000 each in the heavily marketed financial savings product.
While the promoters at An Post are expressing satisfaction with the inflow of savings -- running at close to €2m a day -- last Friday Stewart Draper at Dolmen Stockbrokers was more sceptical of the numbers. "This is weak enough demand, it is a trickle of funds probably because the product is not offering a significant premium to bank interest rates," he said. "It is not like the Special Savings Investment Accounts (SSIAs), which provided a compelling opportunity for small savers."
The SSIAs raised subscriptions of €11.7bn over six years.
The solidarity bond offers a return of just one per cent but carries an attractive kicker for longer term holders. Any saver who cashes in after five years will get a 10 per cent bonus while those who last seven years receive 22 per cent and the 10-year holders will receive a full 40 per cent, giving them a total of 50 per cent over the period.
The minimum investment in the bond is just €500 while the maximum is €250,000, with joint holders allowed to invest €500,000.
Small savers can invest as little as €25 a month into a special An Post account opened for this purpose until they reach the €500 figure.
The bond was announced by the Government in last December's budget in the hope of raising large sums of revenue from the public to assist the Exchequer in capital investment programmes over a 10-year period.