New State Savings 4 Year "Solidarity Bond" Term Deposit

Discussion in 'Deposits' started by CiaranT, Dec 12, 2010.

  1. CiaranT

    CiaranT .

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    Details are starting to emerge about the new NTMA/An Post, 4 year term deposit product, which will be called, "Four Year Solidarity Bond".

    It looks like it will pay 4.10% AER Gross subject to DIRT.

    According to The Sunday Tribune:

    (There are many other threads on this forum discussing the safety of NTMA products, which are worth reading).
     
  2. camlin90

    camlin90 Frequent Poster

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    Doesn't sound right - 10 year NSB is paying the equivalent of 5.43% before DIRT at present.

    4.1% net I presume?... which would be a good deal but the other bonds would have to be re-priced.

    Was thinking of throwing something into the 3 year bond - but if the above article is right, need to get in now before the rates drop - decisions decisions
     
  3. CiaranT

    CiaranT .

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    Yeah, it is far from clear. We will have to wait and see what the NTMA announce in January.
     
  4. theresa1

    theresa1 Frequent Poster

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    I'm closing my AIB Direct 1 year reward fixed rate a/c and thinking of opening a 4 year Bond as i will have about €140,000 and this is over the €120,000 so i cant go with cert or 3 year bond. I also have a premium demand and easy access reward account I will probably close and may put more into the 4 year bond or go with a cert?
     
  5. mcriot29

    mcriot29 Frequent Poster

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    Old post
     
  6. theresa1

    theresa1 Frequent Poster

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    Repayment instructions - state savings account,external bank account or cheque. I would be interested to hear what people went for and why?
     
  7. CiaranT

    CiaranT .

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    External current account rather than another State Savings account. After 4 years it prevents you forgetting about the deposit by receiving the lump sum back!
     
  8. theresa1

    theresa1 Frequent Poster

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    Might go with the cheque option.
     
  9. The Ghoul

    The Ghoul Frequent Poster

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    I have recently purchased a 4 year Solidarity Bond with 20k. It was a choice between this or prize bonds. I didn't consider the 10 year Solidarity Bond and I can't buy any additional savings bonds or certs which I think are the best State Savings products.

    I expect savers and investors (aka the "rich" :rolleyes:) to be hit hard in December's budget. If DIRT increases again most of the State Savings products are at least partly or fully protected from this.
     
  10. theresa1

    theresa1 Frequent Poster

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    Would love to hear what repayment instruction you choose and why?
     
  11. jpd

    jpd Frequent Poster

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    What makes you think they won't tax State saving accounts?
     
  12. The Ghoul

    The Ghoul Frequent Poster

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    I didn't fill in section 6 or 7 of the form - I presume that this means they wil open a "linked State Savings account" and pay my interest into that.

    The repayment options seem like much of a muchness to me, I don't really see why someone would pick one over the other.
     
  13. Eithneangela

    Eithneangela Frequent Poster

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    +1. Any saver in State Bonds is going to be hit in the budget - maybe by the removal of Dirt free interest or something like that. It's just wise to be cautious about moving big money around the State sector before the Dec budget.
     
  14. The Ghoul

    The Ghoul Frequent Poster

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    Highly unlikely in my view. My thoughts here
    http://www.askaboutmoney.com/showpost.php?p=1290034&postcount=42

    DIRT will likely increase, it is an easy target and any increase will slightly affect existing solidarity bonds as while the bonus is tax free, the "coupon" is subject to DIRT.
     
  15. CiaranT

    CiaranT .

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    As The Ghoul said, that is very unlikely.

    The NTMA are pushing State Savings products via heavy advertising campaigns at the moment. The state wants more of the national debt to be financed from domestic sources to help try and keep yields low.

    The government/NTMA wont want to dis-encourage domestic financing of the national debt.
     
  16. theresa1

    theresa1 Frequent Poster

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    The Evening Herald on Monday had a large advert for State Savings and I have heard plenty of radio ads.
     
  17. jpd

    jpd Frequent Poster

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    Maybe I'm being overly cynical but a big push to collect State Savings before the budget, including products with a fixed term of 3-4 years, and the budget has to reduce the deficit by € 3.5 billion .....
     
  18. CiaranT

    CiaranT .

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    Yeah, huge advertising campaign via The Irish Times in recent weeks as well. The NTMA are really pushing domestic investment in our national debt.
     
  19. The Ghoul

    The Ghoul Frequent Poster

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    I was just looking at how much is in NTMA State Savings.
    Dec 2010: 12,680 million
    Dec 2011: 14,063 million
    Jun 2012: 14,904 million

    So, an increase of 841 million in the first 6 months of this year after an increase of 1383 million in the whole of 2011.

    Also, the total has was 7,021 million in 2007 and 9,287 million in 2009.
     
  20. kennyb3

    kennyb3 Frequent Poster

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    Hardly surprising given the lower of deposit rate elsewhere. It's just money moving sidewards.