Whether to opt for tax-free or DIRT taxable account

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mct1

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Nothing to do with current financial crisis - we're thinking of opening an An Post Deposit plus and/or Savings Cert account which are apparently tax free. The alternative is putting the cash in an AIB deposit account where the interest is subject to DIRT tax. As we're tax payers at higher rate, are there implications of choosing one over the other?

Sorry if this question sounds naive but I didn't know tax-free savings accounts existed until today!. We're currently "between accountants" so have noone else to consult. Thanks.
 
An Post deposits rates are poor enough even when their tax free status is taken into consideration. The fact that you are a high rate income tax payer is irrelevant. DIRT is the full extent of your tax liability on deposits that are not tax free. You can, for example, get 5.5% from Anglo Irish Bank's Premium Demand Deposit Account right now which is 4.4% net of DIRT. I doubt that you will get that rate tax free with An Post:

An Post Interest Rates for Savings Products
 
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