# Calculating interest due on deposit a/c



## Audi_Driver (3 Aug 2014)

I'm am just comparing deposit accounts on permanent tsb's website. 

I am interest in the online 6 month fixed term deposit a/c.  

Per the website if I invest €10,000 (gross rate 2%, gross return 0.99%, AER 2.01% fixed)

I will receive a gross return interest amount of €98.63, which would then be subject to dirt tax @ 44% leaving me with €55.23 at the end of the fixed term?

However, I always thought this is the way the deposit account would work. 

I invest 10,000, end of term I receive 2.01% interest which would be 10,000 x 2.01% = €201, the €201 would then subject to dirt tax @ 44% leaving me with €112.56 into my hand after the end of the fixed term?

Would someone throw some light please on how much interest would be due me if I invested 10,000 into permanent tsb's 6 month fixed term online deposit a/c. 

Thanks.


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## Branz (3 Aug 2014)

without looking at the website, as you should have posted a link perhaps, the 98.63  looks like a 6 month return and the 201 is a annual figure .vorsprung durch technik
How did u arrive at Dirt being 44% I believe it is 41% and then you may have USC and PRSI on top of that, depending on your income and tax position.


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## Audi_Driver (3 Aug 2014)

Thanks, I cannot post links yet. 

Oops my apologies dirt is in fact 41% alright.


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## Lightning (4 Aug 2014)

ircoha said:


> without looking at the website, as you should have posted a link perhaps, the 98.63  looks like a 6 month return and the 201 is a annual figure .vorsprung durch technik
> How did u arrive at Dirt being 44% I believe it is 41% and then you may have USC and PRSI on top of that, depending on your income and tax position.



There is no USC on deposit interest. 

I calculate 59.23 EUR net after 6 months assuming 41% tax rate:  
10,000*0.0201*(6/12)*(1-0.41) = 59.23 EUR.


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## dub_nerd (4 Aug 2014)

Here's the PTSB link. Whatever their definition of "six months", they say the gross return is 0.99%, which matches the stated €98.63 to two significant figures.


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## Homer (15 Aug 2014)

1% for six months is equivalent to an annualised rate of 2.01%. The figure of €98.63 seems to be based on a deposit term of 180 days.  Not sure why they are using 180 days. I would have thought 182 days would be more logical as it equals exactly 26 weeks and therefore avoids the possibility of deposits maturing over a weekend (bank holidays excluded).


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## Branz (15 Aug 2014)

It may depend on the day count convention that is used in the interest calculation: could be 360 rather than 365, or 30 day months etc
eg
[broken link removed]


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## Homer (15 Aug 2014)

ircoha said:


> It may depend on the day count convention that is used in the interest calculation: could be 360 rather than 365, or 30 day months etc
> eg
> [broken link removed]



Does that mean that you only receive 360/365ths of the interest that is due to you?  Sounds like the kind of scam that banks would perpetrate on their customers.


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## Lightning (15 Aug 2014)

'AER' should always use an actual annual 365 day count. 

'Gross' can sometimes use a 360 day count and sometimes a 365 day count. 

Always look at the AER rate.


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## Homer (16 Aug 2014)

Well, if they're quoting an AER of 2.01% but only paying interest of €98.63 after six months on €10,000, it better be payable after 180 days.


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## freewheeler (27 Nov 2015)

Appreciate if anybody can calculate what gross interest should be on a PTSB  Interest First, Fixed Term Deposit a/c for 2 year term,advertised @ 2.5% AER, starting 5/12/13 and maturing 7/12/15, amount of €50K. PTSB statement states rate applied as 2.445%? .Thanks


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## Lightning (28 Nov 2015)

50,000 * 0.025 * 2 = 2,500 EUR gross. 

If it is an Interest First account you should have go the interest within 30 days of account opening and not at maturity.


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## freewheeler (28 Nov 2015)

Ciaran. Thks for that, thought it should be about your figure, even if interest was not compounded after first year, However ,I only received €2448.35 gross for the 2 years+ 1 day extra, due to maturity date occuring at weekend.So, was wondering if I had been short changed.Apparently  PTSB have applied a rate of only 2.445%, despite origional agreement letter states AER at 2.5%. Anybody know if they are correct. Thanks.


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