According to the Irish Times today in this  article about the new Solidarity Bond -

” An individual who invests the minimum sum of €500 will almost double their money, earning a net return of €475.”

I hope Irish Times readers realise this is an error and don’t all rush out to buy the new Solidarity Bond based on this incorrect information.
If the figures quoted were correct – it would mean the bonds had an interest rate of 95% over the ten years. The Irish Times article does mention the correct rate – but many people may be misled by the figures given.
The reality is – that the actual net rate over 10 years is 47.5%.  An investment of €500 over 10 years will result in a return of  €237.50 .
To get the same rate in a bank account subject to DIRT – you would have to be getting a rate of 5.28%

See more details of the Solidarity Bond here

The idea of a National Solidarity Bond was announced in  the 2010 Budget – full details were released today.

The details of the new solidarity bond were confirmed today. It will  pay an annual interest rate of just  1% a year (fixed)  with added bonuses for those who leave the money in for five, seven and ten years .
The maximum bonus after 10 years is 40% – so the maximum gross return possible is  50% over 10 years .

If you cash in the bond at the end of 5 years you will get a 10% Bonus
At the end of 7 years you will get a 22% Bonus and if you keep the bond for 10 years you will get the maximum 40% Bonus.

DIRT will be payable on the basic interest – but not on the bonuses.

A 50% gross return over 10 years is  4.14% AER . After DIRT this comes to 3.96% AER.
A normal deposit account would need to be paying 5.28% before DIRT to match that rate.

An investment of €1000 in solidarity bonds for 10 years will result in a balance of €1475.  (3.96% AER Net)
Keeping €1000 in the solidarity bond for 5 years will give a balance of  €1137.50  – after DIRT which is 2.5% AER (Net).

The bonds  will be available for purchase in all post offices from Tuesday May 4th 2010.
With some instant access accounts paying as much as 3.3% before DIRT it will be interesting to see the level of take up for these new bonds that require a 10 year commitment to get the top rate of 3.96% Net.

There are already similar rates available  with An Post  : – the 17th Issue Savings Certificates over 5.5 years is paying 3.53% AER (Net)

The minimum individual investment in this Solidarity Bond is €500 . Savers can deposit a lump sum or put in  regular lodgements of €25 or more.  (The €25 a month will be put in an An Post deposit account  until you reach a balance of €500 – after 20 months).

The maximum individual investment allowed in the solidarity bond  is €250,000 .  (€500,000 for joint accounts) There are no fees, charges or sales commissions attached to the bond.

Savers can access their money at any time without penalty – but the longer money is left invested the greater the return in the form of bonuses.
Money invested in these solidarity bonds will be used by the government to finance  capital-investment programmes.

See other bank  savings rates for comparison.

Also see www.StateSavings.ie  for full terms and conditions of the solidarity Bond

UPDATE: Oher Savings bonds from An Post – state   …”  Interest earned on savings bonds is exempt from DIRT, income tax and capital gains tax in Ireland and is not returnable as income to the Revenue Commissioners ”

The  Solidarity Bond  Terms state clearly that the bonus is not subject to tax in Ireland – but it says that  “Normal Revenue Commissioners requirements will apply to DIRT exempted accounts”.

Haven – which is the broker-only mortgage arm of  EBS – have increased variable mortgage rates as from today.  Their 2.35% rate for LTVs under 50% has been increased to 2.59%.  Their next best rate is 2.79% . See the best variable rates in Ireland here.

Eflow – the company that are responsible for operating the M50 tolls – have warned people to be aware of possible fraudulent emails or phone calls.

Apparently there have been calls and emails from people  claiming to be from Eflow offering  special deals  relating to eflow or barrier free tolling.
These emails or phone calls are probably  an attempt to defraud you.
If you are requested to provide payment details by return of mail or during a phone call -  you may be at risk of fraud. Never disclose your personal details in response to any unsolicited request.

Eflow say that recent unsolicited phone calls claiming to offer reduced rate tolls for 1 year in return for a €100 payment upfront are in no way related to eflow and customers are advised to be wary of such an offer.
If anyone suspects a phone call is fraudulent -  ask if you can call them back on the Eflow number  1890 50 10 50 to complete any valid transactions on your eflow account, thus ensuring you are dealing with an eflow representative.

The new Carbon tax that was introduced in the December Budget will  take effect  from this Saturday  1 May 2010 on  Kerosene, Marked Gas Oil, Liquid Petroleum Gas (LPG), Fuel Oil and Natural Gas. VAT will also be charged on the carbon tax.

This new carbon tax will result in a price increase of Kerosene (Heating Oil) by 4.3 cent a litre including VAT. This will mean an extra €43 Euro on 1000 litres – which is an increase of about 6.5%

Natural gas prices will rise by €0.00307 per kWh consumed. With the average annual gas usage in Ireland around 25000 Kwh – this will mean an increase of around €76 a year on the average gas bill. (About 7%).

EBS were expected to raise their mortgage rates for existing variable rate customers from May 1st – but they have put up rates for new applicants as from  today – 22nd April.
The EBS rates have risen for new applicants by as much as 0.45% in some cases. (Depends on LTV)  See the updated list of the lowest variable mortgage rates here.

Existing EBS customers will see the standard variable rate go from 2.63% to 3.23% with effect from May 1st

You know how every advert for something financial in Ireland always ends with  “ we are regulated by the financial regulator” – well that is something you will not hear at the end of a VHI advert.
VHI – the state owned  health insurance body – has again managed to avoid coming under regulation by the Financial Regulator. The proposed date for regulation to be put in place for VHI has been postponed by the Government until January 1st, 2012. If they were to come under financial regulation – they would be probably fail under solvency rules.

The Irish Government  faces court action by the European Commission for failing to implement an adequate regulatory regime to oversee the State-owned VHI.

This is at least the fourth deadline set by the Irish Government for such a move. All previous deadlines have been missed.  They initially set a date of  September 1st 2009 for the State-owned company to be authorised by the regulator – a deadline that was later extended to December 31st and subsequently to March 31st 2010.

With Quinn Insurance in administration because of poor solvency – and now VHI failing again to meet regulatory requirements – the only  health insurance company  in Ireland that seems to be in good financial order and regulated and authorised by the Financial Regulator is Aviva .

Aviva Group Ireland plc is a wholly-owned subsidiary of Aviva Group plc, the world’s fifth-largest insurance group and the biggest in the UK with 55,000 employees serving over 50 million customers worldwide.

The Irish  Financial Regulator has lifted part of its ban on Quinn Insurance selling new motor insurance cover in the UK. The original ban was put in place on March 30th when Quinn Insurance was taken into administration.

Quinn Direct will now be allowed to sell new insurance policies to provisional licence holders in Britain and Northern Ireland, the regulator announced.

The regulator said it had taken the decision after “careful consideration and analysis” of information provided by the administrators of Quinn Insurance Ltd as well as after consultation with the UK’s Financial Services Authority (FSA).