Savings
DIRT and the cost of staying in cash
Irish households hold well over €160bn on deposit, much of it earning close to nothing before a 33% tax. Here is what DIRT is, what the banks are actually paying, and how the arithmetic changes when the Personal Investment Account arrives in 2027.
Updated September 2026
How DIRT works
Deposit Interest Retention Tax is deducted at source at 33% by Irish banks, An Post and credit unions. You see only the net interest, and for most people there is nothing to file. There is no exemption band: the first euro of interest is taxed the same as the last. Some savers also pay PRSI on deposit interest, and over-65s under the income limits can claim exemption using Form DE1.
The catch with foreign deposits
What Irish savings accounts pay
| Provider | Type | Headline rate | After 33% DIRT |
|---|---|---|---|
| AIB / Bank of Ireland | Demand savings | 0.00%–0.25% | ≈0.00%–0.17% |
| PTSB | Regular saver | up to 1.50% | ≈1.01% |
| An Post | State savings (tax-free) | ≈1.50% AER equiv. | 1.50% (DIRT-exempt) |
| Trade Republic | Uninvested cash | ≈2.00% | declared at marginal rate |
| Raisin (EU partner banks) | 1-year fixed | ≈2.40% | declared at marginal rate |
On a €20,000 balance, the difference between a 0.10% demand account and a 2.40% fixed term is roughly €460 a year before tax — meaningful, but still an amount that inflation can erase. Cash protects the number in your account, not its purchasing power.
Cash versus a PIA over ten years
| €20,000 for 10 years | Deposit at 2.0% | Fund at 6% (current rules) | PIA at 6% |
|---|---|---|---|
| Gross value | €24,380 | €35,817 | €35,817 |
| Tax paid | €1,445 DIRT | €6,485 exit tax + deemed disposal | flat annual charge |
| Net | ≈€22,935 | ≈€29,332 | higher — rate set in Budget 2027 |
The point is not that cash is wrong — it is that cash is being asked to do a job it cannot do. Three to six months of expenses belongs on deposit. Money you will not touch for a decade has been sitting there mostly because the alternative was taxed punitively and was a nightmare to file.
What the PIA does and does not replace
- The account holds investments. Cash inside it is restricted to facilitating investment transactions, so it is not a savings account substitute.
- No minimum holding period is proposed, so it is more flexible than a fixed-term deposit or a pension.
- There will be an annual contribution limit, confirmed in Budget 2027 — so moving a large cash balance in may take several years.
- Your emergency fund, and anything needed within two or three years, stays in cash.
Frequently asked
What is DIRT tax in Ireland?
Deposit Interest Retention Tax is a 33% tax deducted at source by Irish banks and credit unions from the interest paid on deposit accounts. You receive the interest net and generally have nothing to file.
What is the DIRT rate in 2026?
33%. Over-65s on modest incomes and certain permanently incapacitated savers can claim exemption, and PRSI may also apply to deposit interest for some taxpayers.
Do I pay DIRT on foreign deposit accounts?
Interest from EU banks accessed through platforms such as Raisin is not subject to DIRT at source, but it is taxable in Ireland — usually at your marginal income tax rate rather than 33% — and must be declared yourself.
Will the Personal Investment Account replace deposit accounts?
No. The PIA holds investments, not cash — cash inside it is limited to settling transactions. It is intended for money you can leave invested for years, while an emergency fund still belongs in a deposit account.
Is DIRT better than 41% exit tax?
The rate is lower, but it applies to a much smaller return. A 2.5% deposit taxed at 33% nets about 1.7% a year, which has repeatedly lagged Irish inflation. Long-run equity returns taxed even at 41% have historically produced far more after tax.
Keep reading
Run your own numbers
Compare a Personal Investment Account against a deposit account and a standard fund over 10, 20 or 30 years — with real Irish rates.
Open the PIA calculatorInformation only, not financial or tax advice. Final PIA rules — the contribution limit, the tax-free threshold and the flat rate — are due to be confirmed in Budget 2027 and the related Finance Bill. Figures cited are from the Department of Finance roadmap, Revenue, Skatteverket, GOV.UK and the IRS.