KBC Fixed @ 2.8% v Interest Upfront @ 2.7%

[spinmaster]

Am I right in thinking - does KBC's 1 year fixed Interest Upfront account @ 2.7% make better sense than their standard 1 year fixed rate at 2.8%, given proposed extension of PRSI to interest earnings

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[Lightning]

With the 2.80% product you will get 2.80% less 33% DIRT less circa 4% PRSI.

With the 2.70% product you will get 2.70% less 33% DIRT but the 2.70% figure assumes you invest the upfront interest in an account that also pays 2.70%.

 

[jonocon]

With the 2.80% product you will get 2.80% less 33% DIRT less circa 4% PRSI.

With the 2.70% product you will get 2.70% less 33% DIRT but the 2.70% figure assumes you invest the upfront interest in an account that also pays 2.70%.

I lodged a sum to KBC at 2.7% and just received the upfront interest and it amounted to 2.7% less 33% dirt so I am not sure that the interest needs to be reinvested to gain rate. Am I missing something?

 

[Gervan]

I agree, jonocon. We invested at 3.8% (those were the days, last September!) and got 3.8% interest, plus a few pennies. So if you invest your 2.7% interest you would end up with a slightly higher overall percentage at the end of the year.
Definitely go for upfront, and take the uncertainty out of things.