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PapaNana2012

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taxable interest vs tax deductible interest
is taxable interest rate better than tax deductible interest rate

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I am not familiar with the term  "tax deductible interest rate".   Taxable interest means that it is reported yearly as income and depending on the amount is charged as income based on your current fax bracket.   Other interest which is "tax deferred" means you do not report it as current income and thus pay no taxes on it.  The time when you pay tax is when you take possession of the amount at the tax bracket you would be at at that time.  If you were actively employed today and your tax is 35% then you pay this on the current taxable interest income.  At another date when you are perhaps retired when you have substantially reduced income, and your tax rate is 25%, you would pay 25% income on the tax deferred interest.

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