Opinion Expect a raft of 4 year deposits

Discussion in 'Budget 2017' started by Duke of Marmalade, Oct 11, 2016.

  1. Duke of Marmalade

    Duke of Marmalade Frequent Poster

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    DIRT to be reduced over 4 years to 33%. Good for life assurance savings but also encourages 4 year deposits.
     
  2. Ihana

    Ihana Frequent Poster

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    Not so much when the interest rates are so dismal.
     
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  3. username123

    username123 Frequent Poster

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    Does this apply to "exit tax" on funds?
     
  4. username123

    username123 Frequent Poster

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    Well its better than increasing it to 50%!! Minister can't control bank deposit interest rates in fairness.
     
  5. Ihana

    Ihana Frequent Poster

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    Im not criticising it, Im just not sure its going to encourage 'a raft of 4 year deposits' on its own.
     
  6. Brendan Burgess

    Brendan Burgess Founder

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    Agree with Ihana

    People should not tie up their money for 4 years to save 8%.

    However, maybe the marketing people in the banks might persuade them to do so.
     
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  7. elacsaplau

    elacsaplau Frequent Poster

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    This is just reducing the rate of DIRT so that this year your net interest is pittance but next year you get pittance plus - hardly flood gate opening
     
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  8. Duke of Marmalade

    Duke of Marmalade Frequent Poster

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    I agree there will not be a torrent of money going into genuine 4 year deposits. But surely deposits should be structured as 4 year instruments but with early access. I presume exit tax is similarly reduced and as life assurance savings are for the longer term it effectively reduces the exit tax to 33% for new life assurance savers.
     
  9. Sarenco

    Sarenco Frequent Poster

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    Was there an announcement on exit tax? I missed that.
     
  10. elacsaplau

    elacsaplau Frequent Poster

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    I don't think so?!
     
  11. SBarrett

    SBarrett Frequent Poster

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    Different taxes Duke. DIRT used to be at 33% and the exit tax for life assurance products was at 41%.

    Seeing as we're now flush with money again, did he say he'd stop taxing long term savers with the deemed distribution?

    Steven
    www.bluewaterfp.ie
     
  12. Duke of Marmalade

    Duke of Marmalade Frequent Poster

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    In the very beginning exit tax was 3% bigger than DIRT to allow for the "gross roll-up". Then a few years back he equalised the two rates "to encourage long term savings". I presume that when the details are thrashed out the exit tax will follow the DIRT rate.
     
  13. SBarrett

    SBarrett Frequent Poster

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    The influx of Budget summaries into my inbox from the life companies have all said no reduction of exit tax. I'm sure there will be lobbying going on to have this reduced too. The devil is always in the detail which will be released on 20 October.


    Steven
    www.bluewaterfp.ie
     
  14. elacsaplau

    elacsaplau Frequent Poster

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    That all makes sense, Steven

    Presumably, you are advising all your clients to dash to the bank this morning to avail of the massive DIRT reduction? Passing my local bank earlier on my way to work, the queue was already around the corner!!!!