AIB 2.77% 2 Year Deposit

irishfinanceguy said:
The issue is are this long term deposits really competitive at all given instant access are at similar rates
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All depends on what the ECB will do.

ECB is expected to cut rates further. If that happens then instant access rates will fall but those locked into term deposits will be obviously unaffected.
 
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Lightning said:
No access during the 2 years.

Approx - 200000*0.0302*2*(1-.33) = about 8k post tax.
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Would such a large amount of interest still only be subject to DIRT or might it become assessable for income tax/PRSI/USC?
 
ClubMan said:
Would such a large amount of interest still only be subject to DIRT or might it become assessable for income tax/PRSI/USC?
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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 approx post tax formula is probably: 200000*0.0302*2*(1-.37)
 
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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.?
 
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 !
 
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

 
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:

Key Post - Basic information required for the "Money Makeover" forum

It can be difficult, but please try to use a meaningful title in your thread For example "27 year old with mortgage arrears". You will get a much better and much more coherent answer if you give as much information as possible in your first post. For example, if you give your mortgage rate, it...
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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

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.

 
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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