# Lump sum deposit



## suziesu (3 Jan 2007)

I recently recieved a gift of €10,000, which I want to save. Which bank would give me the best rate of interest for saving this amount of money. I will not be adding to this amount, so I know many of the banks require regular montly savings to avail of the best rates. Which bank is the best one for me to save this lump sum with?
Thanks!


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## NorfBank (3 Jan 2007)

Rabodirect.


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## suziesu (3 Jan 2007)

Ive seen higher rates nearer 6.60%, does this only apply if you save a certain amount every month?


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## oldtimer (3 Jan 2007)

The 6.60% only applies to AIB regular saver account, maximum per month is €300. Norfbank has given you the best advice - open a Rabodirect account @ 4.75%. Tell them I told you and I will get €20 added to my account and you will also get €20 added to your account, and both of us will be smiling.


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## NorfBank (3 Jan 2007)

Very good oldtimer, I keep forgetting about the referral bonus. Never again!!


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## suziesu (3 Jan 2007)

ok, how do I mention your name oldtimer?


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## oldtimer (3 Jan 2007)

I think every financial institution know me. Rabodirect are always monitoring AAM so they will know what to do


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## honest (4 Jan 2007)

Instead of 4.75 % from Rabo ( You have to invest 10000 upfront!), why don't you avail 6.6% with a planned direct debit for required monthly payment for AIB account.

from rabo website,
*RaboDirect Savings*4.75%*€1 - €10,000 @ 4.75%* 
€10k - €1m @ 3.70%**€475***AIB Regular Savings6.60%€3,600€127.44

127 is based on 3,600 and 475 is based on 10000!!!!


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## ClubMan (4 Jan 2007)

Are you sure that 6.6% gross _CAR _on regular monthly deposits adding up to €10K would yield higher interest returns than 4.5% gross _CAR _on the full €10K for a year for example?

For details of the best lump sum and regular contribution deposit rates on offer see the Financial Best Buys forum. And bear in mind that it might not be a good idea to keep large amounts of cash on deposit for extended periods of time unless you have specific short term plans for them (e.g. due to the fact that tax and inflation eat into and possibly exceed nominal returns yielding marginal or negative returns on the real value of your money).


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## oldtimer (4 Jan 2007)

Honest -(a) I don't think you are comparing like with like re your calculations  Rabodirect (4.75%) v monthly saver account (6.60% AIB max €3,600 per year?) Over a year a lump sum of €3,600 with rabodirect would yield €170 gross. Bearing in mind your calculation of €127.44, the monthly saver will take considerably longer to reach a yield of €170 gross. By the way you don't have ''to invest €10,000 up front'' with Rabodirect. You can invest *any amount* *up to €10,000* to receive the 4.75%. (B) Re your calculation ''127 is based on 3600 and 475 is based on 10000'' - are you conttradicting yourself here? These calculations indicate Rabodirect pays 4.75%, AIB regular saver pays 3.54% over a year. All of which has me confused as to why you indicate in your first sentence AIB is better than Rabodirect over a year.


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## bos4 (7 Jan 2007)

[ *All of which has me confused as to why you indicate in your first sentence AIB is better than Rabodirect over a year*]

I think honest was trying to say that you get more for less there. I am not a fan of these regular savings accounts at all, they try to seduce people in with big figures and return relatively little while tieing you up with direct debits. Rabo is the way to go for the lump sum of 10k as oldtimer said


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## hattrick_12a (8 Jan 2007)

okay excuse the simple question here, but 

would one be better putting the 10K in Rabo at 4.75% and then dripping feeding the AIB at 6.6%?

Probs not but I haven't done the calculations but just curious. 

I always find the different interest rates that these financial people use a bit confusing to the layman. Maybe it's just good marketing or am being cynical?

Also,

What if one had 10K in Rabo and wanted to save, lets say 300euro (AIB Max) *per month*. Would one be better putting it with AIB at 6.6% or with NR at 4.15%?

Essentially, what I am saying is which is the best rate for saving 300 euro a month? AIB, BoS, BOI all seem to have little sneaky T&Cs with there Regular Savings Rates.


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## ClubMan (8 Jan 2007)

hattrick_12a said:


> would one be better putting the 10K in Rabo at 4.75% and then dripping feeding the AIB at 6.6%?
> 
> Probs not but I haven't done the calculations but just curious.
> 
> ...


This post and the thread in which it was posted might be of interest to you.


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## bacchus (8 Jan 2007)

Put your 10K in Rabo, and transfer €1000 monthly (or €2000 for joint account) to Anglo Irish Saver account at 6%.


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## hattrick_12a (10 Jan 2007)

Bachus 

Clubman contradicts what you are saying according to his calculations. Can you offer some calculations that support your argument, thanks


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## bacchus (10 Jan 2007)

hattrick_12a said:


> Bachus
> Clubman contradicts what you are saying according to his calculations. Can you offer some calculations that support your argument, thanks



I don't think there is any contractions. If i understand his post correctly, Clubman raises a question regarding regular savings of €300 pm at 6.6%  running up to €10k vs €10k lump sum deposit at 4.75%.

What i am saying is: put €10k on Rabo at 4.75% and drip feed an Anglo Irish a/c (1000 or 2000 per month) at 6%. 
So it takes 10 or 5 months for the €10k to be moved to a 6% interest a/c
while it would take 33.33 months to move €10k to 6.6% interest a/c.

So, worse case is 4.75% best case is 6%, but at any moment in time (less few days for moving money) from day1, the full €10K is earning interest.


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## honest (13 Jan 2007)

I agree with oldtimer about calculations. This discussion is about Lumpsum deposit and he is right. My point is to get maximum interest on your money..

But I like the comments from clubman (dumping your money upfront and losing the its value due to inflation etc.). Bacchus idea sounds good to maximize the interest.
Anyway, I will think twice rather than getting only 4.75% on my 10K deposit.


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## hattrick_12a (25 Mar 2007)

bacchus said:


> I don't think there is any contractions. If i understand his post correctly, Clubman raises a question regarding regular savings of €300 pm at 6.6%  running up to €10k vs €10k lump sum deposit at 4.75%.
> 
> What i am saying is: put €10k on Rabo at 4.75% and drip feed an Anglo Irish a/c (1000 or 2000 per month) at 6%.
> So it takes 10 or 5 months for the €10k to be moved to a 6% interest a/c
> ...




Sorry now but my understanding is this: 

€10k on Rabo at 4.75% gives $10486.43 before DIRT see here



> 10 or 5 months for the €10k to be moved to a 6% interest


Lets say 10 months, therefore

1000 at 6% gives $10271.66 befoe DIRT see here

Even 12 months gives $12386.52, which is still less.

Obviosly I am missing the money that you would earn from the money you had in Rabo  before moving it, but I don't know how to calculate this. 

So it seems you are earning more in the Rabo. I am aware that interest rates have changed lately but I think this still holds true. 

When you say that 





> So it takes 10 or 5 months for the €10k to be moved to a 6% interest


Is this the same, in that the lump some you have put into date, lets say 10,000, is earning  6%??

If so maybe in the long term it might work out more, but for the first year, I don't think so.


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## KalEl (25 Mar 2007)

The key is that €10,000 sitting in a Rabo account for one year will earn 5%. With the regular savings products only the first contribution earns the high rate for a full year.


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## yewtree (30 Mar 2007)

could i just ask does everybody find all rates by banks quoted as confusing as i do. looking at lump sum investments, i cannot compare one bloody piece of literature from one bank to another. ie E.A.R, C.A.R. the E.C.B. rate and A.P.R.

like i said i challange anyone to compare two banking leaflets at face value. 

how does one convert to the bottom line? anyone help me please?


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## ClubMan (30 Mar 2007)

_AER/CAR _are the same thing and should be used for comparing deposits. Note that they are generally gross so _DIRT _of 20% will normally apply. Note also that the _AER/CAR _on a regular saver account are a little misleading in that because the money is being drip fed you don't get that rate on all lodgements over a single year of saving (e.g. first lodgement is there for 12 months, second for 11 etc.). See my earlier post for more on this.

_APR _only applies to loans.

_ECB _is the the ECB (main refinancing operations) base rate - some loan or deposit rates may track this (e.g. _ECB _+ x%).

_EAR _is the thing on the side of your head.

Perhaps you need to read some of the guides provided by [broken link removed]?


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## yewtree (30 Mar 2007)

thanks clubman,

will read on as suggested.


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## CCOVICH (30 Mar 2007)

ClubMan said:


> _EAR _is the thing on the side of your head.


 
And is also used when referring to the Equivalent Annual Rate


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## ClubMan (30 Mar 2007)

CCOVICH said:


> And is also used when referring to the Equivalent Annual Rate


Didn't realise that and thought it was just AER! 

By the way this post is probably more informative about rates and how they apply to regular saver accounts.


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