An Post Savings Bonds

bbam

Hi..
Looking for input or advice...
If I were investing €20K and wanted guarenteed return is there anywhere better than An Post Savings Bonds, they're offering 10% tax free with no charges in 3 years..
Thanks
bam

thetonynator

As far as i know, the an post savings certs are better, i think its 20% over 5 and a half years . . .?

bbam

Indeed, I saw that after my post... I really just wondered if there are any other investment products giving better returns..

Thanks

eclectichoney

The certs are very slightly better than the bonds in terms of AER, but you do have to lock in for a longer period so that has t be taken into account as there is less flexibility.

venus11

Have your looked at http://www.halifax.ie/

eclectichoney

venus11 wrote: »

Have your looked at http://www.halifax.ie/

Given that there is no DIRT liable on Savings certs / bonds - the net rates are significantly higher - equivalents to around 4.3%-ish I think (or more in the case of certs)

Black Rock

An Post and the Prize Bond Company are selling agents for the NTMA State Savings products and they provide a counter service to collect money on behalf of the NTMA – savings never reside at the Prize Bond Company or with An Post but instead are transferred immediately to the Government under the management of the NTMA.

Because State Savings money is placed with the Government, the repayment of principal, interest (and cash prizes in respect of Prize Bonds) is a direct unconditional obligation the Irish Government and there is no expiry date or limit to the amount of money that is protected.

The NTMA Brochure 1 on their website explains all of this and NTMA Brochure 2 list of the variety of savings products that are covered.

The NTMA State Savings products net after tax rates are as follows

NTMA State Savings …………………......AER........RETURN
3 year Savings Bonds ……………….........…..3.23% ....10.00%
4 year National Solidarity Bonds …….........3.31% ....13.92%
5 ½ year Savings Certificates………….....…3.53% ....21.00%
10 year National Solidarity Bonds…......….3.95% ....47.30%

Your money is not locked away as you can have it all back (and any interest due) on demand at any time - repayment takes a maximum of 7 days.

Given the favourable low tax / no tax advantage of the NTMA State Savings products you need to divide these figures by 73 and multiply by 100 (grossing up for 27% DIRT) to provide the grossed up rates for comparison with other savings products which are subject to DIRT at 27% - the grossed up rates for comparison are as follows -
GROSS
RETURN/AER - NTMA State Savings ……………………......AER........RETURN
13.70%...4.42%...3 year Savings Bonds ………………....…..3.23% ....10.00%
19.07%...4.53%...4 year National Solidarity Bonds ……..3.31% ....13.92%
28.77%...4.84%...5 ½ year Savings Certificates……………3.53% ....21.00%
64.79%...5.41%...10 year National Solidarity Bonds…….3.95% ....47.30%


Full details in NTMA Brochure 2 – NTMA State Savings ™ Summary of Products available on the StateSavings ie website