Confused: 4yr Nat. Solidarity Bond V 3/5yr Nat. Certificates with new changes

Hi all,

I hope I'm posting correctly, first timer!

I've read the best buys thread and I've compared the information from before and after December 16th.

Previously I was swaying towards the 4 year solidarity bond, but now I can't see much difference between the three choices (the 10year bond is not practical for me).

Can anyone explain which one offers the better return and why it does? I'm very confused now. Eg. am I correct in understanding that if I put in 10k into the 4year bond, it will grow by approximately 1k in the 4 years?

I appreciate all opinions because I am not good with figures
Thank you.

3 year savings bond - 10,000 will be worth 10,700 after 3 years
4 year solidarity bond - 10,000 will be worth 11,168 after 4 years
5 year savings cert - 10,000 will be worth 11,500 after 5 years

These are all net figures using current DIRT rates and assuming that the interest is not subject to PRSI when it is introduced for unearned income.

The solidarity bond is partially subject to DIRT while the other two are fully exempt from DIRT. This means that if you were to take out a solidarity bond and DIRT were to increase, your return would be slightly less than 11,168. Whereas the returns for the other two products would be unaffected by a DIRT increase.

You will lose a lot of interest if you encash any of the above products before maturity. Much of the interest is earned just before the products mature. Eg if you were to encash your 10,000 after 1 year

3 year savings bond - 10,000 will be worth 10,070 after 1 year
4 year solidarity bond - 10,000 will be worth 10,067 after 1 year
5 year savings cert - 10,000 will be worth 10,070 after 1 year

Thanks The Ghoul.

I think I know what you mean.

PRSI on savings?? I must have missed that section when I was reading it!!

From your example it looks like it would be worth going the extra year on the 5 year certificates and if it's DIRT exempt.

Thanks for giving me something else to think about now. Better put some thought into this. Thanks!