Unlocking Financial Potential: The Overlooked Opportunities in Interest Earnings and Tax Relief
In the current financial landscape, many Irish savers are inadvertently leaving substantial money on the table. A significant portion of household savings remains in low-yield accounts, resulting in missed interest earnings and underutilized tax relief opportunities.
The Interest Earnings Gap
Recent analyses have highlighted a concerning trend: Irish households are collectively missing out on up to €3.5 billion in interest annually due to funds being held in accounts with minimal returns. Despite the availability of higher-yielding options, a staggering 90% of household savings are still in accounts offering negligible interest.
This inertia not only diminishes individual financial growth but also contributes to the record profits of banks, which benefit from the low interest payouts.
The Underutilised EIIS Tax Relief
Parallel to the missed interest earnings is the underutilisation of the Employment and Investment Incentive Scheme (EIIS). The EIIS offers investors up to 50% income tax relief on investments in qualifying SMEs, presenting a dual advantage of supporting local enterprises while reducing personal tax liabilities.
Investing in EIIS funds, such as those offered by BVP, allows individuals to diversify their portfolios and potentially achieve higher returns, all while availing of significant tax reliefs.
Bridging the Gap
The reluctance to shift from traditional savings accounts or to explore investment avenues like the EIIS often stems from a lack of awareness or perceived complexity. However, with proper guidance and information, investors can make informed decisions that align with their financial goals.
By reallocating funds from low-interest accounts to higher-yielding investments and taking advantage of available tax reliefs, individuals can significantly enhance their financial well-being.
BVP’s Solution /Offering:
Save Now, Invest Later: Smarter Approach to savings and investment
As part of our 2025 EIIS Fund launch, BVP is offering investors a smarter way to prepare. Open a bunq online savings account and receive a 1% free top-up – a rewarding way to grow your funds while you wait to invest. With the EIIS Fund opening in October 2025, this initiative reflects our “Save now, invest later” approach, giving investors a head start by earning more on their capital now, and positioning themselves for attractive tax-relief-backed returns later.
It’s imperative for savers to reassess their financial strategies, considering both the immediate benefits of higher interest earnings and the long-term advantages of tax-efficient investments. Engaging with financial advisors and exploring options like the BVP EIIS Fund can be pivotal steps toward maximizing one’s financial potential.
REF: Sources: bonkers.ie, The Irish Times, Irish Independent, Revenue.ie