AIB 3.02% 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.
 
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