A lump sum investment plan is where you make an initial investment in your choice of funds. There is no obligation to invest any subsequent amounts. Normally the minimum initial investment is €5000.
Impartial advice for your financial future
Lump Sum Investments
If you have a lump sum to invest, there are some important things to take into consideration before making your final decision:
- Goals – are they growth or income driven?
- Timeframe – how long are you prepared to invest your money for?
- Access – how important is it for you to have access to your money?
- Risk – how much risk are you prepared to take with your money in order to achieve a higher return?
Where to Invest?
There are a wide range of fund choices available and you can choose from many different asset classes: Shares, Bonds, Property, Commodities and even Currencies are all now easily accessible to the retail investor.
What About Risk?
Assessing risk is very important when investing money. We will help to determine what your risk profile is and advise on the most appropriate portfolio for you. You may prefer to invest in a capital guaranteed fund which secures your money or you might want to spread your investments over different funds of various risk levels. By investing in a wider range of asset classes you are increasing your diversification which can help to reduce your risk.
Monitor your Investments Online
Many providers now have online access so you can follow your investment! For ideas keep an eye on our ‘fund of the month’ and other investment news stories. To get an idea of how your money might perform why not check out the calculator below.
Did you know?
- It is easier than ever to invest money in exotic markets such as India & China. All growth porfolios should have some exposure to these and other developing markets
- Although Guaranteed Funds do offer capital security - they tend to have higher charges than non guaranteed funds - it's important to be aware of this
- Investment products are generally designed for periods of five years, which is why they have exit charges - be aware of these before you commit your money
Investment Calculator
The potential growth in your investment amount is based on a return of 4.0% (medium) and 6.0% (higher) yearly after charges and taxes. Figures are estimates and are not a reliable guide to the future performance of your investment. Figures are shown for illustrative purposes only. Actual investment growth will depend on the performance of the underlying investments and may be more or less than shown. Figures may fall as well as rise.
Frequently Asked Questions
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What is a lump sum investment?
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Is this a type of life assurance policy?
The majority of funds are unit-linked and structured like a life assurance policy. This means in the event of the policyholder´s death a death benefit equal to 101% of the value of the policy is paid at the date of the final claim. It is however not designed to be a life assurance policy and if you require life assurance you should take out a separate policy.
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Why do I have to send Money Laundering documents?
Under the Criminal Justice Act 1994 we are obliged to obtain and confirm the true name and correct permanent address for each customer. To verify these details, we require original proof of identity (photo identification), a financial statement and utility bill confirming your current permanent address.
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What are exit charges?
Exit charges are applied to some policies in the first five years. They are applied to dissuade the investor from withdrawing his funds from the policy during this time. We would recommend in the vast majority of cases that a client should be considering at least a five year investment term as most products are not designed for investment terms of shorter periods. Exit charges usually start at 5% of the fund value in the first year reducing to 1% in the fifth and no exit charges thereafter. These charges do however vary from company to company so you should contact us for more details.
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What is exit tax?
Exit tax is the tax deducted on withdrawal or assignment of the policy. The relevant life company will operate the deduction of tax. Tax is currently calculated at 28% of growth on all investments. This tax charge, at a rate equal to the deposit interest retention tax rate plus 3% (making a total current charge of 28%) will be paid over by us to the Revenue Commissioners. You will then have no further tax liability on your investment.
In circumstances where the policy has not been surrendered, a deemed disposal event occurs on the 8th anniversary, and each subsequent 8th anniversary, of the inception of the policy whereby exit tax, currently 28%, is payable on the excess of the surrender value over the sum invested. Any tax payable will be deducted from your policy and paid to the Revenue Commissioners. -
Can I split my investment into different funds?
Yes. The majority of life companies offer a range of funds in each of their lump sum products and once you are invested you can switch between the funds according to your investment choices. There may be a charge for switching although the majority of companies offer a number of free options per year. Switching is not considered to be exiting the product and no exit tax is applied for switching out of a fund, once you remain invested in the product. Funds come with different risk levels from secure eg (cash) to highly volatile (eg concentrated equity funds) and the choices that are made depend on the investor’s appetite for risk. Some products do not offer an option to invest in different funds and these are generally funds which offer a capital guarantee. Speak to your One Finance advisor today for further information.
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What is Deemed Disposal?
The Finance Act 2006 changed the taxation of life assurance policies by introducing a deemed disposal event at the end of eight years. This is effective retrospectively and will apply to all life assurance policies set up since 1st January 2001.
In circumstances where the policy has not been surrendered, a deemed disposal event occurs on the 8th anniversary, and each subsequent 8th anniversary, of the inception of the policy whereby exit tax is payable on the excess of the surrender value over the sum invested. This exit tax will be deducted by the life companies in accordance with Revenue procedures and paid to Revenue as with the current exit tax deduction on surrender. Where there is an actual disposal subsequent to the deemed disposal, an adjustment is made so that the total tax paid does not exceed that which would have been payable had the deemed disposal not occurred.
