Taxable Equivalent Yields
The following chart enables you to determine
the yield required from taxable savings
plan to match that of a "Tax
Deferred" savings
plan. Read down the
first column to find the tax deferred
interest rate and across the
top row for your approximate tax bracket.
The taxable equivalent yield is found
where the tax-deferred row and the
tax bracket column meet.
Interest
Rate
|
Income
Tax Brackets* |
| 15% |
25% |
28% |
33% |
35% |
| 3.00% |
3.53% |
4.00% |
4.17% |
4.48% |
4.61% |
| 3.50% |
4.12%
|
4.67% |
4.86% |
5.23% |
5.38% |
| 4.00% |
4.70% |
5.33% |
5.56% |
5.97% |
6.15% |
| 4.50% |
5.29% |
5.99% |
6.25% |
6.72% |
6.92% |
| 5.00% |
5.88% |
6.67% |
6.94% |
7.47% |
7.69% |
| 5.50% |
6.47% |
7.33% |
7.64% |
8.21% |
8.46% |
| 6.00% |
7.06% |
7.99% |
8.33% |
8.96% |
9.23% |
| 6.50% |
7.65% |
8.67% |
9.03% |
9.71% |
10.00% |
| 7.00% |
8.24% |
9.33% |
9.72% |
10.45% |
10.77% |
| 7.50% |
8.82% |
9.99% |
10.42% |
11.20% |
11.54% |
| 8.00% |
9.41% |
10.66% |
11.11% |
11.94% |
12.31% |
| 8.50% |
9.99% |
11.33% |
11.81% |
12.69% |
13.08% |
| 9.00% |
10.59% |
11.99% |
12.50% |
13.44% |
13.85% |
| 9.50% |
11.18% |
12.66% |
13.20% |
14.18% |
14.62% |
| 10.00% |
11.76% |
13.33% |
13.89% |
14.93% |
15.38% |
Taxable Equivalant =
(Tax Deferred Interest Rate) X [1 ÷ (1
- Your Tax Bracket)]
Click here to view triple
compounding comparisions
*Income Tax Brackets are those in effect
for the 2005 tax year. |
