# What rate is AIB using to calculate the TVM?



## Dermot S. Lally (12 Dec 2016)

Hi Brendan, can you tell me what interest rate AIB are using in their TVM calculation?


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## PadKiss (12 Dec 2016)

Hi all
The interest rate is approx .70% for each year of suffering, people can give their own views of the merits of it but at least it got included with clarity. Padraic


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## Bronte (13 Dec 2016)

If a person goes into unauthorised overdraft the banks apply onerous interest rates.  Why don't they apply such an interest rate to compensation claims.

Why should it be the deposit rates that are used.


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## Brendan Burgess (13 Dec 2016)

Hi Bronte

In calculating the refund both AIB and permanent tsb used the actual mortgage rate charged. 

AIB seems to have gone a step further and paid it twice.

If someone had to pay credit card interest because they were overcharged on their mortgage, they could appeal for extra compensation. 

  "If a person goes into unauthorised overdraft the banks apply onerous interest rates. Why don't they apply such an interest rate to compensation claims." 

That is a fair question. 

Brendan


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## Bronte (13 Dec 2016)

I'll put it another way BB. I'm old enough to remember the banks letters that would threaten you with all sorts of fees for this that and the other.  And then they'd threaten interest on interest etc.  And charge you for meeting the bank manager.  My time is just as valuable as a banks.  People having to deal with this mess, it's their time that has been used up too.  If a bank can charge you in the terms and conditions, of your mortgage or loan, onerous fees and charges and interest than why shouldn't it apply the other way around. 

Why should a bank compensate you using a derisory deposit rate when they themselves never charge anyone such rates themselves for anything.


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## Bronte (13 Dec 2016)

Here we go:

11. Costs, fees, charges and Expenses subject to the CC act 95 ... the applicant shall be liable to the bank for

all fees
costs
charges
expenses

howsoever incurred by the bank.... with interest theron, chargeable at the rate of the interest payable or deemed to be payable (that means they can make up what they like)
as calculated AND COMPOUNDED in accordance witht he practice of the bank.

That's just legal speak for throwing the book at you.

So we should be looking at how a bank handled an arrears customer and how they calculated all the banks fees, charges, costs, interest, penalty interest etc

(above typed from part of my letter of acceptance)


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## Brendan Burgess (14 Dec 2016)

Here is a list of rates I got from AIB 


"Having looked at various options, we decided to that a fair basis for calculating TVM is the best available 1 year fixed savings rate that AIB had over the period. We used the 1 year fixed rate as this was generally the benchmark rate in the market. We used the EBS greater €100,000 rate as this was the highest available in the Group.


By way of context the average 1 year fixed rates for each year were as follows:


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