AIB 2.77% 2 Year Deposit

Lightning said:
USC - No liability.

Income tax - No liability.

PRSI - you are subject to PRSI if your unearned income exceeds €5,000 in a calendar year. AIB pay interest annually with a 2 year term deposit. The interest is approx 4k per year post DIRT but over 5k gross - so you would be subject to PRSI.

Yeah, so good point, that correct post tax formula is probably: 200000*0.0302*2*(1-.37)
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Thanks @Lightning - I just wasn't sure if deposit interest over a certain amount (e.g. €5K) maybe became categorised as income and assessed as such. Does over €5K of deposit interest cause one to become self-assessed? I presume not.
 
ClubMan said:
Thanks @Lightning - I just wasn't sure if deposit interest over a certain amount (e.g. €5K) maybe became categorised as income and assessed as such. Does over €5K of deposit interest cause one to become self-assessed? I presume not.
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My understanding is that if your unearned income, which includes deposit interest, is over 5k, in a calendar year, then you need to register with ROS and pay PRSI. I.e. you must register for self assessment.
 
This looks like an interesting rate . I`m a few months into a 5 year State Savings bond , which will yield 9% at maturity. Seems a long way off now and it might be better cash that in and invest with AIB .. although of course the bank rates may bottom out and SS could be the ultimate better option ... swings & roundabouts !
 
creditworthy said:
This looks like an interesting rate . I`m a few months into a 5 year State Savings bond , which will yield 9% at maturity. Seems a long way off now and it might be better cash that in and invest with AIB .. although of course the bank rates may bottom out and SS could be the ultimate better option ... swings & roundabouts !
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Faced the same dilemma some weeks back and opted for the AIB 6% over 2 years, rather than 5 year savings certs at 9% over 5 years. Remember when comparing the two that the AIB rate is liable to DIRT, whereas the return on Savings Certs is not.
 
Ageless said:
I always thought that people over 70 do not pay PRSI. Wouldn't this also apply, even in the above scenario, with a person over 70 year.?
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Up to the end of 2023, people 66 and over were not liable to pay PRSI. This changed as of 1st Jan 2024 and it now varies between 66 and 70.

See here

Up to 31 December 2023, if you are aged 66 or over, you are not liable to pay PRSI.

From 1 January 2024, you will be able to draw down your State Pension (Contributory) between age 66 and 70. You will continue to be liable for PRSI until you:
  • are awarded the State Pension (Contributory)
  • or
  • reach age 70.
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Thank you for your help Lightning.

As an aside, if you had €200,000 to invest for the next 2 years, would you choose this AIB option or is there a better option out there at the moment?

Is there anything that gives you access to the money but a similar ROI?
 
For a 2 year term, I would choose AIB.

In terms of similar products - BoI pay 2.98% for 1 year 6 months with 25% access during the term.
 
Seratago said:
As an aside, if you had €200,000 to invest for the next 2 years, would you choose this AIB option or is there a better option out there at the moment?
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Are you restricting yourself to deposits only and dismissing all other possible investment options?
If so, why?
Might need a Money Makeover to get useful feedback:

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Seratago said:
Thank you for your help Lightning.

As an aside, if you had €200,000 to invest for the next 2 years, would you choose this AIB option or is there a better option out there at the moment?

Is there anything that gives you access to the money but a similar ROI?
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A point that does not seem to be touched on in this thread is:

Deposit Guarantee Scheme Ireland

The Deposit Guarantee Scheme (DGS) protects depositors in the event of a bank,building society or credit union authorised by the Central Bank of Ireland being unable to repay deposits
www.depositguarantee.ie www.depositguarantee.ie

I certainly would not have over €100k deposited in any institution.

StateSavings are different of course,
 
charlie007 said:
I certainly would not have over €100k deposited in any institution.
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Worth noting that it’s €100,000 per individual (per institution), so in the case of a joint account it can go to €200,000 in which case €100,000 will allocated to each of the account holders and covered in the event of a call on the DGS.

There are also allowances made for temporary high balances, however the cover period is limited to 6 months for these.
 
AIB have changed the T&Cs for their term deposits, reducing the minimum balance from €15,000 to €5,000 wef 5th February 2025. The rates have not been altered.

Change to Minimum Balance from 5 February 2025​

From 5 February 2025, you will be able to open a Personal Fixed Term Deposit account with a minimum balance of €5,000. We made this change based on customer feedback. For in-branch account opening and maturity instructions, this reduction to €5,000 will be available from 5 February 2025. The new minimum balance will also be available on the mobile app in the following weeks.

What does this mean for you:​

I want to open a Personal Fixed Term Deposit with a balance between €5,000 and €15,000:​

Until 5 February 2025, the minimum balance for the accounts will be €15,000. From 5 February 2025, you can open a new Personal Fixed Term Deposit in branch with a minimum balance of €5,000. In the following weeks, customers will be able to open new Personal Fixed Term Deposits on the mobile app with a minimum balance of €5,000.

I have a Personal Fixed Term Deposit Maturing before 5 February 2025, can I reinvest at maturity with just €5,000?​

Until 5 February 2025, the minimum balance for the accounts will be €15,000. From 5 February 2025, you can reinvest with a balance from €5,000 in branch and in the following weeks through the mobile app.
If your maturity is before 5 February 2025 you can choose to close your account at maturity. When the threshold is changed you can then open a new account in branch or on the mobile app. Please be aware that you may not be earning interest on your money in the intervening period and that deposit interest rates are subject to change.
Please visit your branch if you’d like to discuss the savings options which may best suit your needs. We’re happy to help you.

https://aib.ie/our-products/savings-and-deposits/personal-fixed-term-deposit-account
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Does anyone know if you can open this AIB's 2 year term deposit without being an AIB customer? Or does it require you to have an AIB current/personal account?
 
michael2525 said:
Does anyone know if you can open this AIB's 2 year term deposit without being an AIB customer? Or does it require you to have an AIB current/personal account?
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An non-AIB customer can open an account in branch by filling out forms etc. Money must be lodged within 7 days of opening it.
 
I am not sure 3% gross is anything to write home about? Is there not a thread here with higher rates from non Irish banks? Personally not convinced inflation and higher rates are over yet either
 
michael2525 said:
Does anyone know if you can open this AIB's 2 year term deposit without being an AIB customer? Or does it require you to have an AIB current/personal account?
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I phoned them and was told you must have a current account with Aib.
 
mihaela said:
I phoned them and was told you must have a current account with Aib.
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That is strange. I do NOT have a current account. Have a Personal Demand Account (free) which I set up in a branch. I use this to send money to online saver, and also set up Personal Fixed 3 % 2 year account through this. Hope that helps.
 
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