Deposit BOI or Savings Bonds

rilly99

A family member has some money in a demand account and i was going to buy some Savings bonds from An Post as I understood these gave the best return ( verus bank deposit rate ) , the rate I am getting from BOI are :

AER 12 months- 1.8% , 24 mnths -1.97& 36 mnths 2.04%

These seem very favourable when I look at An Post


National Solidarity Bond (10 Year)
30% tax free over 10 years, AER 2.66%
National Solidarity Bond (4 Year)
6% tax free over 4 years, AER 1.47%
Savings Certificates
Interest 10% after 5 years 6 months, AER 1.75% tax free.
Savings Bonds
Interest 4% after 3 years, AER 1.32%, tax free.

Question is what i am mising the BOI looks on paper better any help appreciated

srsly78

State saving products are DIRT-free.

http://www.revenue.ie/en/tax/dirt/

DIRT = they take 41% of your interest, thus reduce BoI rates by this much to see what you actually get.

So BoI real returns look like this:
12 months- 1.8% = 1.062% after DIRT
24 mnths -1.97 = 1.1623% after DIRT
36 mnths 2.04% = 1.2036% after DIRT

rilly99

srsly78 wrote: »

State saving products are DIRT-free.

http://www.revenue.ie/en/tax/dirt/

DIRT = they take 41% of your interest, thus reduce BoI rates by this much to see what you actually get.

So BoI real returns look like this:
12 months- 1.8% = 1.062% after DIRT
24 mnths -1.97 = 1.1623% after DIRT
36 mnths 2.04% = 1.2036% after DIRT

Thanks for the info and figures just been looking at dirt person concerned is over 65 income OAP so 12k per year - looks like ( to me ) not liable for dirt - in this case is the boi the better bet ? Thanks in advance

srsly78

Well that changes everything then!

rilly99

Go with BOI then it looks like - thanks for the help

topper_harley2

rilly99 wrote: »

Go with BOI then it looks like - thanks for the help

PTSB have much better rates than BOI. See here for them: http://www.askaboutmoney.com/showthread.php?t=101813

PTSB 12, 16, 18 and 24 month offerings are all better than those you quoted from BOI