Please send your queries to Dominic Coyle, Q&A, The Irish Times, D'Olier Street, Dublin 2 or e-mail to dcoyle@irish-times.ie. This column is a reader service and is not intended to replace professional advice. Due to the volume of mail, there may be a delay in answering queries. All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.

De Valera bonds

When going through my mother's belongings after her death, we found a Republic of Ireland Bond Certificate, issued by Eamon De Valera, President of the Republic of Ireland on January 24th, 1920, to Catherine McCombs (my great-grandmother) in the amount of $10.00 under No. 106717. The bond is in excellent condition and we are all curious as to its history and monetary value (no price can be put on the sentimental value). My great-grandmother came from Co Cork and settled in Poughkeepsie, New York. We would greatly appreciate any help you can render.

Ms.J.T., e-mail

Surprisingly, I have not come across "De Valera bonds" before, although I gather quite a few do exist. The bonds were issued by Eamon De Valera when he visited the United States to raise funds and support for the Irish republican cause during the War of Independence. I understand they were issued in various denominations from $5 up to $100. The idea was that they would be redeemed once the fight for independence was over and the Republic won. Of course, that didn't happen immediately and I am not sure how many, if any, of the bonds were redeemed. In 1936, a law was passed - the Dail Eireann and Funds (Amendment) Act 1936 - which set June 30th, 1936, as the final date for making an application for repayment of all such bonds. Notice of the deadline was publicised in various ways, including notices in newspapers in Ireland and the United States.

Given that legislation, there is no way the bond could be redeemed at this stage I am informed by the National Treasury Management Agency, the body responsible for managing the Republic's debt.

While it may have no face value, it would be worth some money as a collectible item. However, even this may not be as much as you would imagine. According to one Dublin valuer, such documents would be worth about £50, rising to a maximum of £100 depending on condition and "a very fair wind" at any sale. You would get more for earlier and more ornate "Fenian bonds" issued in the 1880s.

Having said all that, it is a unique piece of family and national history and is probably best retained as an heirloom.

Savings scheme

I want to open a joint account to avail of the new Government Special Savings Incentive Scheme but am worried about what will happen if one or other of us dies during the life of the scheme. Can you tell me what the implications would be?

Mr J.W., e-mail

First things first. You cannot open a joint account under the scheme. Quite why I am not sure, as I am certain the institutions would prefer to deal with larger sums of money in joint accounts than smaller amounts in two separate accounts. I can only guess that the Government feels it would be more difficult to police such a provision. As to what happens if you die during the term of the savings account, the answer is that the investment will be treated in the same way as if it had been invested for the full five-year term. In other words you, or should I say your estate, will not be penalised for early encashment, under which you would pay 23 per cent on both the contributions to date and any return.

On death, your estate will receive:

a) your contributions to date;

b) the Government contribution of 25 per cent of those contributions; and

c) any investment return less tax at the base rate plus 3 per cent - currently 23 per cent.

Much has been written about the new Special Savings Incentive Scheme, to be introduced on May 1st, where the Government will add 25 per cent to the monthly savings of an individual. Was there not also a proposal to introduce a scheme where the Government would reduce or waive DIRT if savers agreed to leave existing savings on deposit for either three or five years. Initially, the scheme was being confined to savings with credit unions but subsequently it was stated that it would apply to all financial institutions. Can you shed any further light on this proposal?

Mr P.M.M., e-mail

The schemes are one and the same. Your understanding emanates from reports before the Budget about talks between Minister for Finance Mr McCreevy and the Irish League of Credit Unions. There was a lot of speculation about how the Government would offer tax-efficient savings through all financial institutions, not just the credit unions.

The Minister said at the time that he hoped to announce details in the Budget. As it turned out, the details were announced as the Finance Bill was going through the Oireachtas.

Suppose an investor puts money regularly into an equity-type product under the Government's new Special Savings Incentive Scheme. Roll the clock forward four years and 11 months. The index underlying the investor's product has been doing very well. The investor is looking forward to next month when he can reap his reward. Suddenly, a temporary shock hits the market. The index plummets 10 per cent, stays down for a couple of months (coinciding with the maturity of his equity-type product) and subsequently fully recovers. My question is this: Does the investor have the discretion to intervene and tell the fund manager to hold off selling the underlying equities for a couple of months in the hope of a recovery? This actually happened in the last month when the ISEQ index experienced a fairly severe "v-shaped" dip.

Mr G.C., e-mail

The only significance of the five years is that the Government will not contribute the 25 per cent bonus to contributions after that time. There is no obligation to withdraw your savings from either a deposit fund or an equity-based investment fund at the end of the five-year term. In fact, if everyone does do that, the government of the day will be facing an artificially inflated consumer-spending pattern, which will undermine the very thing the Minister is trying to do with this scheme.

Check the small print of anything to which you sign up, but accept as a general rule that you will have to inform your fund manager of your desire to close your equity-based investment fund at the end of the five-year term if that is what you want to do. It will not be cashed in automatically.

Most equity-based investments are designed for the medium- and longer term, with charges front- loaded into the early part of the investment period. Concern has already been expressed about the suitability of equity-based investments for people looking to avail of the scheme strictly for the five years on the Government bonus.