We know the main driver of growing our wealth over the medium to long term – owning stakes in all the great companies of the world via low-cost investment funds.

This remains unchanged for 2024 as it did in 2023, and as it always will. It’s the core of our investment philosophy which is backed up by many decades of history.

What about our short-term cash savings?

The theme of the past two years in financial markets has been rising interest rates. This should have been great for our short-term cash savings, the savings we keep as an emergency fund or for a large outlay in the next few years.

The Problem

The European Central Bank deposit facility – the main driver of deposit rates in Ireland – rose by 2.50% in 2022 and a further 2% in 2023 to start 2024 at 4.00%.

One might have expected to see a similar rise in Irish bank deposit rates, but this has not happened.

Short-term Irish bank deposit rates hover around 0% and we are required to tie up our money for a year or more to achieve 2%

The Solution

The solution is simple and straightforward – regulated Money Market funds which currently yield 4.00%

  • A money market fund is a type of investment fund that primarily invests in low-risk, high-grade, short-term securities
  • There is no requirement to commit cash for a specified period
  • There is no “lock-in” and no exit penalty when you need your cash back

We saw large flows out of banks into money-market funds throughout 2023. However that was barely the tip of the iceberg. Irish households hold a staggering €150 billion in bank deposits, the majority of which are held on demand and earning close to 0%.

Inflation is the enemy…

The following charts illustrate how quickly cash loses value (purchasing power) because of inflation when left in an account earning barely anything.

€100,000 loses almost a third of its value in purchasing power after ten years in the bank deposit illustration, but maintains its purchasing power in the money market illustration.


Chart 1:

Bank deposit @0.20% – Illustrated in GREEN
Money Market Fund @3.25% net – illustrated in ORANGE

Deposit barely budges, growing to €102k after 10 years

Money Market Fund grows to €138k after 10 years.



Chart 2 – Purchasing Power @3% inflation

Purchasing power of bank deposit falls to €73K after 10 years – Illustrated in GREEN

Money Market Fund keeps pace with inflation at €103K after 10 yrs – Illustrated in ORANGE


Please get in touch if you’d like to learn more about smart cash management strategies, or to see personalised charts to illustrate your own household or corporate situation.


John McWey
Ardbrack Financial Limited
Office: 021-4773833 / Mobile: 083-4115277



Disclaimer: The content of this article is for general information purposes only. It does not constitute tax or investment advice as it does not take into account the investment objectives, knowledge and experience or financial situation of any particular person or persons. You are advised to obtain professional tax and investment advice suitable to your own individual circumstances. Ardbrack Financial Limited makes no representations as to the accuracy; validity or completeness of the information contained herein and will not be held liable for any errors or omissions.