The Government’s new investment accounts will not allow people to invest in crypto currencies such as Bitcoin, an expert in finance has said.
Tánaiste and Minister for Finance Simon Harris is due to announce a new State backed investment scheme.
It is understood that there will be no minimum investment level and a tax free threshold will be set out.
Savers will have a choice as to whether they wish to invest in shares, bonds and ETFs.
The idea is to boost the number of Irish people investing in the stock market, instead of leaving their money in deposit accounts where it is gradually eroded by inflation.
On Newstalk Breakfast, Financial Services Ireland director Patricia Callan said the scheme will be good for those who save.
“Currently, we have €1.75 billion on deposit to actually get some of that money moved into investment accounts and, for a lot of people, it's very complex,” she explained.
“People are risk averse, the tax system is very complicated.
“So, the idea behind the accounts is that this is an opener, that we launch something that's simple, that's straightforward, that has a tax incentive, which gets the Irish people interested to begin with, that then they will read a bit more about it, decide on which products to invest.
“Over time, that then people will get a better financial return because we know in the long term, medium to long term, the markets always outperform.”
Hands of an elderly pensioner holding leather wallet with euro currency money. Picture by: Alamy.com. Ms Callan acknowledged that there is a degree in risk that comes with investing money in the stock market.
However, she added that leaving money in a deposit account comes at a cost as well.
“I think that's really what we want to do as part of this, is to start talking about creating an investment culture in Ireland,” she said.
“People have to realise that essentially that, again, it's not risk free leaving money on deposit, that actually you are losing money each year to inflation - you've got less money to spend.”
Ms Callan noted that the new scheme will not prevent people from leaving money on deposit, it simplifies the process behind investing it
“They can still obviously have a range of products,” she said.
“So, you would still want money on deposit to easily accessible, you will want to have your pension fund.
“But this might be something that you might put in for maybe that five year horizon when you're saving for your deposit or doing something, you're getting a better return, but you're getting actually safeguarding your money.
“And I think in terms of compensating people for that first, you know, step into what's seen as riskier activity, that then the tax incentive piece will hopefully, you know, get people's head around this. And then over time, people become more confident."
A leather wallet with Euro coins in a mans hand. Picture by: Alamy.com. However, the scheme will not facilitate all forms of investments.
“The minister has been clear that, for example, very risky investments, for example, cryptocurrency and derivatives will not be included and equally cash will not be included,” Ms Callan said.
“So, you won't just be able to move your money over here to get the tax advantage, because this is about changing behavior, changing culture.
“Obviously, these accounts will be limited, but they're open for everyone.
“So, even if you only got a few hundred quid left over at the end of the month, you can put it in here and see it return over time.”
Main image: Split of Simon Harris and Bitcoin. Pictures by: Newstalk and Alamy.com.
