Bank and credit union savings rates have shrunk to almost zero over the last several years. So how do we get the best returns on savings and, more importantly, given this extremely low rate environment, what is the best way to save in 2022?

How much to keep in the current account?

With interest rates at zero, current accounts are a net cost. But they are still a necessary part of day to day money management. I suggest keeping no more than one month’s expenses in your current account, hopefully just enough to avoid additional low (or no) balance charges. Take a look at to get the right account for your needs so as to reduce fees as much as possible.

How much to keep in the deposit account?

For me, the deposit account is the place for your emergency fund – money saved for that rainy day. Think about keeping four or five months of expenses in deposit account cash. Yes rates are close to zero and inflation will erode the value of your money, but this money allows you to sleep at night while investing surplus cash. The value of having this security is priceless. Again, is a good resource for finding the best returns on savings accounts – the best rate at the moment is 0.25% but that’s only if you commit to regular contributions.

What about state savings?

Despite the tax free interest, which in effect means they beat bank deposit rates, I am not a fan of state savings. The 3yr Savings Bond pays a 0.33% AER and the 5yr Savings Certificates pay 0.59% AER – not exactly inflation busting! But my main problem with state savings is that your cash (which by definition is your emergency fund as everything else should be invested) is theoretically tied up for at least three years. I would accept lower deposit account rates in exchange for (more valuable) instant accessibility.

What about prize bonds?

I’ve said it before and I’ll say it again – I don’t like prize bonds. Like state savings, interest (ie, winnings) is tax free but the aggregate 0.35% rate of return is poor. While not as locked away as state savings, I see far too many people place surplus cash in prize bonds and leave it there for years. In other words, their money should be earning a far higher return in a stock market investment as it is clearly not the family emergency fund.

How do we get the best returns on savings?

It’s called the stock market. I’m very serious. There is far too much money in Ireland sitting in cash accounts (all of the above) earning next to nothing. We have got to start thinking of money invested simply and cheaply in global stock markets as savings. Yes we need the patience and time to allow for short term swings but the long run return is rewarding. The US S+P 500 has delivered an annualized average return of around 10.5% over the last 60 years. Therefore, the answer to the savings question is simple – put an appropriate chunk of cash in a bank account and don’t worry that it’s actually going to lose value after inflation. This cash buffer then allows you to invest the rest for the medium to long term and earn the best possible return on your total savings.

If you like this article, try this one: How to Invest

Do you want to gain a better return without taking crazy risks? Call me on 01 276 0006 or 086 850 8577 or email me at