About 11,500 people have invested €255 million so far in the 10-year National Solidarity Bond, the government’s new savings product, launched this past Spring. That many people can’t be wrong, can they?
Politicians like Cork’s Michael McGrath, the Oireachtas’ Finance Committee chairman certainly don’t think so.
Last week he described the bond as “a real success story”, but then, he also supported NAMA, the €50 billion bailout of the insolvent banks and the state guarantee of €440 billion worth of deposits and bank debt too.
The purpose of the National Solidarity Bond is to allow ordinary people to help bail out our heavily indebted government by lending it their money for a 10-year period.
For this great act of ‘solidarity’ the state guarantees to return to them their stake, plus a fixed one per cent annual return, which is subject to annual DIRT tax (currently 25 per cent).
There’s also the maximum bonus of 40 per cent if you leave your money untouched for 10 years to consider.
And if you decide you want your money back after five years, you get a 10 per cent bonus; after seven years, a 22 per cent bonus – the bonus is tax free.
If you invest €10,000 in the bond, you will receive a total return after 10 years of €14,750 and this works out at an annual after tax return of 3.96 per cent.
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