national recovery bond

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maura said:
Does anyone know if there is an update on this bond?
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It was announced this evening. 1% basic rate with bonuses. Max possible is 50% over 10 years. Bonuses free of tax.
More details here http://www.*****************.com/national-solidarity-bond.html
 
It's not a very impressive return. I wonder who they are hoping will invest.
 
What's the verdict then? - One to avoid?

For me, ten years is far too much risk verses (possible) return.
 
It sounds ideal for someone who wants to put their money somewhere and not think or worry about it. Prevents them spending the money as much as anything else.

But 10 years is a long time. What will inflation be in 5 years time!? I think I'll do my bit and put in a modest amount, 3K or so.
 
I've read a bit about this and listened to 'experts' on de radio.From what I've learn't I wouldn't touch it with a barge pole.An Post savings certificates offer a better rate and thats where I'm putting a few bob for my Son so he can get to college.
 
brendanyumo said:
I've read a bit about this and listened to 'experts' on de radio.From what I've learn't I wouldn't touch it with a barge pole.An Post savings certificates offer a better rate and thats where I'm putting a few bob for my Son so he can get to college.
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Actually I'm not sure that's totally accurate. (From the Anpost.ie website) the AER on savings certificates is 3.53%. The AER on the solidarity bond is 4.14%. Which would make the bond better if you commit to the 10 years (as most of the interest is paid on the form of bonuses).
 
camel said:
Actually I'm not sure that's totally accurate. (From the Anpost.ie website) the AER on savings certificates is 3.53%. The AER on the solidarity bond is 4.14%. Which would make the bond better if you commit to the 10 years (as most of the interest is paid on the form of bonuses).
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Remember as well, you dont pay DIRT on Savings Certificates, whereas you will with the Solidarity Bond. Not great IMHO.
 
The 1% is fixed, not variable.

From the State Savings website: "1% fixed interest paid annually for 10 years".
Source: http://www.statesavings.ie/Downloads/NSBBrochure.PDF

State Savings: National Solidarity Bond
10 Years 3.96% (A normal deposit account would need to be paying 5.28% to match this rate because this product as the interest is not fully subject to DIRT)
Note 1: €500 minimum, €250,000 maximum (€500,000 for joint account)
Note 2: The bonus on this account is not subject to DIRT, the normal interest is subject to DIRT.
Note 2: Savers will receive the interest in the form of 10 annual payments of 1 per cent and a 'bonus' at the end of the 10 year term. If a saver cashes in their term deposit before the end of the fifth year they will not qualify for the 'bonus'.
Note 3: This is available from May 4th 2010.
Note 4: NB: As the interest penalties are significant on this account, you should only consider this product if you are certain that you will not need access to your money at any stage over the next 10 years. 10 year term deposits are not suitable for most savers. You should also be aware that you take on considerable upward interest rate risk by fixing for 10 years.
Deposit protection: Irish government guarantees all State Savings deposits.
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Tentman said:
Remember as well, you dont pay DIRT on Savings Certificates, whereas you will with the Solidarity Bond. Not great IMHO.
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Dirt is not payable on the bonus element of the Solidarity Bond.

The figure after DIRT on the Solidarity Bond is 3.96% (after 10 years)
The 3.53% on Savings Certificates is (after 5.5 years)

www.*****************.com
 
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