Can't afford to open a Government savings scheme account? Not really the saving type? It's time to stop procrastinating, put your excuses to one side and sign up for the Government giveaway before it's too late.
There is now a little more than two weeks to go before the April 30th deadline for the Government savings scheme. The only commitment is €12.50 per month for the next 12 months. It's all about keeping your options open. For less than the cost of a pint a week, you will have the option to take full advantage of the scheme when, hopefully, your income increases in a few years time.
Askaboutmoney.com, the discussion forum for financial issues, explains that the danger of leaving your application to the last minute is that there is very little time left to correct processing errors. The website estimates that one-in-10 applications are initially rejected due to errors.
An Post and the credit unions will accept cash, while most of the other institutions require you to set up a direct debit.
If you are starting off on the minimum amount now and hoping to save more in the future, go for a variable rate deposit account, so that you will be able to increase the contribution when your income improves. There are some restrictions on varying the monthly savings amount with fixed-rate deposit accounts.
If you need to access your cash before the five years of the scheme is up, you will be able to withdraw it from your account but you will effectively lose the Government's contribution.
To open an account you need three types of documents:
1. A pay slip or social welfare card with your PPS number on it.
2. Some photo identity, such as a passport or a driving licence.
3. Evidence of your address, e.g. a utility bill or bank statement, but not a mobile phone bill.
The advice from banks and building societies to consumers intending to participate in the scheme is to do so immediately. The Revenue Commissioners will not allow any flexibility on the April 30th deadline. Payment must be collected and all essential documentation received prior to that date.
It is likely that many providers will close to new business earlier than April 30th to ensure that applications can be processed before the scheme expires.
Mr Brendan Burgess of Askaboutmoney.com advises small savers not to worry too much about which is the best savings option or what financial provider to use. The key thing is to open an account, any account, before the deadline. As long as you are in the scheme, you will be able to switch to another institution or type of account when you have more money and more time.
