Return on regula saver a/c's

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lotus

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Can anyone tell me how to calculate the total amount of money that can be accumulated on regular saver a/c's @ 8%, 7.5%, 7.15% etc?

Eg Anglo Irish reg saver a/c 8%......If I invest the max €1000 per month, how much will I have accumulated in 12 months time? (€12K + how much interest?

Also is one better to remove this cash in 12 months and put in a lump sum savings a/c? eg 6% Irish Natiowide a/c or will the "old money" continue to accumulate interest in the regular savers a/c after one year?

Thanks in advance......just tryin to maxamise my returns
 
12 x 1000 = 12000

12000/100 x 8 = 960

DIRT @ 23% = 220.8

Total interest payable = 739.20

This is my understanding of it, going by the new DIRT rate from last budget. I am open to correction.
 
Not as simple as that PaddyW - you have to account for the fact that you are only putting in €1000 per month at 8%. Interest earned must be accounted for on a month by month basis rather than in lump sum. So month one is 1000*8%/365 *30 (days in month) - so if month 1 was 30 days before next lodgement then €6.58 interest will be earned. Then you must calc month 2 at €2000 on same formula above and so on...

DIRT rates change effective 01/01/09
 
This calculator is also useful but some people have reported that it doesn't appear correctly for them (displays Greek or Cyrillic characters or something).
 
Re: Return on regular saver a/c's

Motley Fool has one too.... [broken link removed]
 
Re: Return on regular saver a/c's

They all seem to vary in final amounts though, well for me anyway. Unless I'm doing something wrong.
 
Some calculators may assume monthly interest, while others assume annual interest. Most regular saver accounts pay interest once a year, December, so interest compounding will depend on which month you started. all very confusing. excel may be best approach.
 
I was thinking you calculate the interest on a regular saver as number 14 has stated above. However, I called into Anglo Irish today and the offical demonstrated that the interest is calculated as Paddy W has outlined above.

She explained that the a/c only lasts for one year from date of opening. Thus, apparently you actually earn the same 8% rate on the the money that is saved in month 1 as on the money you save in month 11. It seems a bit generous to me but the Anglo Irish offical seemed to know her stuff.

Of course the chance of the rate of interest still being 8% in a few months time appears to be quite slim, taking account of falling interest rates.
 
lotus said:
She explained that the a/c only lasts for one year from date of opening. Thus, apparently you actually earn the same 8% rate on the the money that is saved in month 1 as on the money you save in month 11. It seems a bit generous to me but the Anglo Irish offical seemed to know her stuff.
Click to expand...
You earn 8% annualized on all contributions but this does not mean that €1,000 lodged in month 1 and €1,000 lodged in month 12 earn the same return. In the former case you (roughly, gross) earn €1,000 x 8% = €80 while in the latter it's €1,000 x 8% x 1/12 = €6.67.
 
did this in excel is it right:

8% regular savings account







€1000 invested each month for 12 months €1000 x 8% x 1/12, €1000 x 8% x 2/12…….





month 1 €1,000.00
€80.00
month 2 €1,000.00
€73.33
month 3 €1,000.00
€66.67
month 4 €1,000.00
€60.00
month 5 €1,000.00
€53.33
month 6 €1,000.00
€46.67
month 7 €1,000.00
€40.00
month 8 €1,000.00
€33.33
month 9 €1,000.00
€26.67
month 10 €1,000.00
€20.00
month 11 €1,000.00
€13.33
month 12 €1,000.00
€6.67










€520.00
 
It's nearly right, but the exact monthly interest rate for an annual rate of 8% compounded monthly isn't 8%/12 (i.e. 0.6667%); it's about 0.6434%.
If you imagine (1 + int%)^12 = 1.08, then you calculate the monthly rate (int).
In Excel you could take the log of 1.08, divide by 12, then antilog (power) and subtract 1.

The interest for each 1000 is:
1 80 This is the same as it's been in for 1 year
2 73.10 Find this by just ((1 + int%)^11) - 1)*1000
3 66.24 As above but ^10
4 59.42 And so on...
5 52.65
6 45.92
7 39.23
8 32.59
9 25.99
10 19.43
11 12.91
12 6.43
Tot 513.89

Much the same anyway :D (The Fool calculator comes up with this total too)
 
lotus said:
I was thinking you calculate the interest on a regular saver as number 14 has stated above. However, I called into Anglo Irish today and the offical demonstrated that the interest is calculated as Paddy W has outlined above.
Click to expand...

She's wrong. The rate quoted on the Anglo site is an annualised one. You don't get 8% on the last payment, you get 8% on amounts there for a year.
 
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