Interest earned on a bank or credit union deposit is taxed at 33% DIRT, deducted automatically before you ever see it. State Savings products from An Post — savings certificates, savings bonds, and Prize Bonds — are entirely free of DIRT by statute, usually at a lower headline rate. This calculator shows which actually comes out ahead for your numbers.
How it's calculated
Both options compound at their own rate over your chosen horizon. The deposit path has 33% DIRT deducted from the interest earned (unless you qualify for the over-65 exemption on total income below Revenue's threshold), while the State Savings path keeps its full return untouched. Because DIRT is charged on every euro of interest with no annual exemption, a State Savings product often wins even at a meaningfully lower headline rate.
Frequently asked
Are Prize Bonds actually worth it compared to a savings account?
Any prize you win is completely tax-free — no DIRT, Income Tax, PRSI or CGT — but unlike a savings certificate the "return" isn't guaranteed, it's a chance in a weekly draw. They're best thought of as a tax-free lottery ticket on money you'd otherwise leave in a low-interest current account, not a substitute for a guaranteed-return product.
Who actually qualifies for the over-65 DIRT exemption?
Individuals aged 65 or over (or permanently incapacitated) whose total income for the year is below €18,000 (single) or €36,000 (married/civil partners) — Revenue's standard income tax exemption limits — can claim exemption from DIRT at source using Form DE1, or reclaim DIRT already deducted. Those same limits, plus the marginal relief that applies just above them, are what the Retirement Income calculator uses for Income Tax itself.
Does DIRT apply to credit union dividends too?
Yes — credit unions deduct DIRT on dividends and interest paid to members at the same 33% rate as banks, and the same over-65/incapacitated exemption route applies.
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