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That's sorta what I'm doing with my car loan - instead of paying extra principal, I'm putting the money into an FDIC-insured account that pays about twice the i
by piperswe 4y ago
That's sorta what I'm doing with my car loan - instead of paying extra principal, I'm putting the money into an FDIC-insured account that pays about twice the interest that I'm paying on my car loan.
- hnick 4y agoDo you pay tax on personal bank interest where you are? Here in Aus you'd be paying tax on the interest at your marginal rate, but if the car is personal that interest is not a tax deductible expense. So you will be ahead at twice the rate, but not by as much as you'd hope so you have to be careful if it's lower.
- piperswe 4y agoI do pay tax on interest, but given the gap between the interest rates it's still a preferential situation (my marginal rate is only 22%)