Savers interested in investment accounts have a range of products to choose from. They can pick the level of risk they are prepared to take, from high risk, where funds will be mainly invested in equities, to low risk, which involves a smaller proportion of equities with the balance invested in bonds and cash deposits.

Savers should look for accounts where charges are competitive and a range of options is offered, with the option to switch between funds over the five-year term.

The ability to switch is important because a saver who, for example, opts for a high equity content account at the beginning of the five-year period may want to reduce the risk as market or economic conditions change or to lock in gains as the fund approaches maturity.

Because savers are building up their investment fund in monthly instalments rather than investing a lump sum for five years, some experts consider the five-year period is not long enough to generate a good return when charges are taken into account.

However, other experts suggest equity-based savings should outperform and that spreading savings over five years also spreads the risk. The products are ranked based on the charges applied by the institutions and assuming a monthly saver contribution of €190.

A four-star ranking puts an institution in the quartile with the lowest charges, while a one-star ranking means it is in the highest charges quartile.

Charges reduce the investment return for the saver but their return will depend on the performance of the investments in their fund. Investment accounts provide the prospect of greater returns than deposit interest, but the trade-off is greater risk to the saver's funds.

For example, a saver opting for the fixed-rate An Post account would get an interest return of 4 per cent per annum. There are no charges on deposit accounts - banks and building societies make their profits from lending on the savers' funds.

Savers opting for investment accounts will pay charges so, to get the same return as an An Post account, an investment account with average charges of 2.4 per cent would need to produce a return of 6.4 per cent.

This 6.4 per cent level of return does not include any risk premium for the saver. A 3 per cent risk premium would push up the required annual return to 9.4 per cent.

Mr Norman Barry of Becketts explained the Government subsidy equals an investment return of 8.9 per cent per annum for a saver who completes the five-year term saving the same amount each month.

A deposit interest rate of 4 per cent per annum, for example, gives a "no risk" return of 12.9 per cent per annum. An equity investor needs an extra return to compensate for the extra risk.

A risk premium of, for example, 3 per cent would mean the equity product would have to produce an annual return of about 16 per cent before charges, he explained.