Sponsored
Are farmers making the most of their money?
Sponsored by
Irish farmers are leaving money on the table, according to Eoghan O’Hara, country head of Ireland for Raisin.
Ireland’s economy is currently in good health. Irish salaries are among the highest in the EU, and Irish food and drink exports reached a record €19 billion last year.
So, it’s easy to forget that Irish investors, including farmers, have some very bad financial habits.
O’Hara said: “It’s important to set out the stall, no pun intended:
"Farmers are like the rest of the population in that we’re all making bad decisions.”
One example O’Hara uses is deposit accounts.
“There’s €170 billion or so in deposit accounts in Ireland. And €140 billion of that is earning less than 0.13%," he said.
“Even more than most people, who are employees, farmers really have to plan their cashflow, whether that’s tax season, or other seasonal ebbs and flows, farmers often need access to cash.”
However when farmers do not need instant access to their money, where is that cash sitting?
O’Hara asked: “If a farmer gets a big payment, maybe from a large order or selling machinery, are they moving that money into their low interest deposit account, or a one-year account that’s generating interest?”
O’Hara wondered if farmers are looking at “all their options”.
Day-to-day banking
Farmers lead unusually busy lives, which might go some way to explaining why they do not always move money where it can work most effectively.
“A lot of us have fallen into the loyalty or inertia trap with day-to-day banking,” O’Hara said.
“Also, a farmer using the bank for day-to-day needs should be questioning whether the money is making interest for them.”
The Raisin representative also highlighted that part of how banks make their money is by using their customers’ finances as a resource.
O’Hara said: “If you leave your money on deposit, they’re using that money for their business.
“It’s not up to banks to give as much money as possible to customers - it’s up to savers to look for interest.”
O’Hara also maintained that many - including farmers - might not be aware of just how much money is available in low-risk accounts, just from interest.
“The opportunity cost is 0% versus 2%, and the latter is potentially worth €1,000 a year.
“We are sacrificing money for being too loyal.”
Time is money
There are several misconceptions, O’Hara said, when it comes to banks and saving.
One is that banks are not viewed as somewhere to make money.
“People aren’t looking at deposit accounts as a safe way to build wealth,” said O’Hara.
“But it can at least keep you as close as possible to keeping up with inflation.”
He added that many businesses owners, including farmers, use current accounts for spare cash, “as a vault, to let money just sit there”.
Another myth, O’Hara said, is that moving money is prohibitively “time-consuming”.
Farmers work long, irregular hours, which might put them off opening new bank accounts.
However, banking is not what it used to be. It’s no longer appointment-based. And indeed, many providers (including Raisin) operate online.
O’Hara said: “Moving savings accounts is too much paperwork? It can be done while out farming on your phone on an app.
“The misconception is that a farmer will be checking that their €10,000 is still there every day, as opposed to checking quarterly to see how much money it’s made.”
He added that checking financial options as little as twice a year can be effective.
“Spending 30 minutes every six months, investigating where your money is, is a good habit to get into.”
Moving money
Farmers are aware of the benefits of EU membership. As Ireland exports far more produce than it imports, it does not hurt to be a member of a major trade bloc.
However, the financial product benefits can also be overlooked.
According to O'Hara, Irish investors can easily place their money in another European bank, often at a much higher rate of interest than at their current one.
“We’re a bridge to other banks in Europe,” O’Hara said of Raisin.
“We give Irish savers access to products across the EU.”
Even though it was founded in Berlin, with a banking function in Frankfurt, O’Hara clarified that Raisin Bank "is all online".
"A customer can choose between 160 saving accounts; and hopefully enjoy better interest," he explained.
“It’s especially suited to farmers who are looking at term deposit accounts.
“They can choose from a term of one month to 10 years. That involves locking money away and a guaranteed interest.”
Another benefit of EU membership is that the money is protected by EU laws.
O’Hara said: “All partner banks are fully regulated and are members of deposit guarantee schemes.
“The level of protection is the same in a German bank as an Irish bank.”
Ultimately, being a European farmer means access to higher interest and to online banking.
“Farmers are time poor, but you can move savings from the comfort of your home," O'Hara said.
Farmers work hard for their cash. They deserve cash that works hard for them.
New customers
Raisin's top offer at the moment is the Starter Account for new customers at 3.10% AER.
Opening a Raisin Starter Account is quick, secure, and completely online.
Here’s what to expect:
- Register your Raisin Account - Complete your registration online in just a few minutes;
- Choose the Raisin Starter Account - Earn 3.10% AER for three months;
- Deposit from €1 to €100,000 - Within the set limits for new customers;
- At the end of the three months - You can choose to have your savings automatically transferred into another savings account available on our platform, so your money continues to work for you without interruption. Alternatively, you can withdraw your funds to your Nominated Account.
Raisin Bank, trading as Raisin, is authorised by BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht) in Germany and is regulated by the Central Bank of Ireland for conduct of business rules. Irish Deposit interest retention tax (DIRT) is not taken at source. Deposit interest earned should be declared to Revenue in an annual tax return.
Sponsored by
