# AIB/Bank of Ireland



## globy (8 Jan 2007)

Hi all,

My SSIA has matured and I hope to receive my cheque from An Post next month. I should have ~7,500 in my SSIA account. I was hoping to open an AIB Regular Saver Account and Bank of Ireland account (6% one) and put €300 a month in AIB and €300 into Bank of Ireland for over a year.

I am a PhD student and therefore for the next 3 years I wouldn’t be earning very much (unless a miracle happens ;-)) and so mid-2007 I would probably reduce both bank lodgments to €100 a month.

Am I correct in saying that with AIB, for the first year, if you lodge the max of 300 a month, you are guaranteed ECB+2.5% and then ECB afterwards until 01/01/2009??What do you get after 2009?? How low can ECB rates fall to during a year??

Does Bank of Ireland work in the same way as AIB or how do they offer their 6% rate. 

Would I be better in just investing all my SSIA with one bank and span the finances out over two-three years?

Thank you in advance for your help.


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## ClubMan (8 Jan 2007)

Have you checked _CCOVICH's _excellent survey of  for details of the best deposit rates on offer?


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## CCOVICH (8 Jan 2007)

ClubMan said:


> Have you checked _CCOVICH's _excellent survey of  for details of the best deposit rates on offer?


 
Ah now, give MugsGame some credit as well!


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## ClubMan (8 Jan 2007)

Sorry - credit to *all *involved so!


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## bos4 (8 Jan 2007)

I'd put the 7500 in Rabodirect and forget about the regular saving thingies. These regular savers make a big song and dance of your money and you wonder what all the noise was for at the end of it.

Best of luck with the PhD, what area are you specialising in?


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## ClubMan (8 Jan 2007)

bos4 said:


> These regular savers make a big song and dance of your money and you wonder what all the noise was for at the end of it.


Can you please explain what you mean by this? It makes no sense to me.


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## bos4 (9 Jan 2007)

6.6%  looks good on the surface. Then you realise that there is a cap on how much you can invest each month. Then it quickly becomes apparent that the interest rate of 6.6% is only paid on one installment, while the rest is proportional -i.e. 11/12, 10/12, etc. The end result being not much in real money at all.

Song and Dance - Bank Staff quoting the rate and setting up the standing order. 
Wondering what all the noise was for - something like 300 euro interest in your account at the end of it.


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## ClubMan (9 Jan 2007)

bos4 said:


> 6.6%  looks good on the surface. Then you realise that there is a cap on how much you can invest each month. Then it quickly becomes apparent that the interest rate of 6.6% is only paid on one installment, while the rest is proportional -i.e. 11/12, 10/12, etc. The end result being not much in real money at all.


Yes - I did some sums that are quoted here  that I think are correct that illustrates this point.


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## hattrick_12a (10 Jan 2007)

If you put 750 away a month in NR vs Halifax, what would be the winner? 

Sorry I just don't get these interest rate stuff that they use,

Thanks.


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## Guest111 (10 Jan 2007)

Halifax would be the winner.
It's simple enough really. The likes of Rabo or NR pay the interest on the principal, e.g. you stick 10 grand in Rabo for a year and you get your interest minus the DIRT if applicable. You can withdraw money at any time. It's just a bank account.

The other Halifax/AIB/BOI products aren't so much savings accounts...they're more savings plans. There are terms and restrictions on the amounts you can save. There are flexibility issues regarding withdrawals.

To filter 10K a year into one of these savings plans would mean saving 800 odd per month. But you're only getting 6.6% for a full year on the first contribution. On the last 800 odd you only get 6.6%/12. That's why the deposit account wins.
But if you're putting away an amount per month the regular saver products are good...provided the lack of flexibilty isn't an issue.


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## ClubMan (10 Jan 2007)

hattrick_12a said:


> If you put 750 away a month in NR vs Halifax, what would be the winner?


Did you read the link that I posted above? Even though the figures compre the the _Halifax Regular Saver _with the _NR Fixed Rate Bond _the comparison with the _NR Demand Online _would be something similar since the variable rate is similar at the moment.


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## sherib (11 Jan 2007)

> Originally Posted by *bos4 *
> I'd put the 7500 in Rabodirect and forget about the regular saving thingies. These regular savers make a big song and dance of your money and you wonder what all the noise was for at the end of it.





> Originally Posted by *Andy Doof*
> ........On the last 800 odd you only get 6.6%/12. That's why the deposit account wins.


I have been utterly confused by these various "Savings & Deposit" accounts' interest rates and am only beginning to get a grasp - thanks to the above posts. An interest rate of over 6% _looks fantastic_ but then as it's spread over twelve months it's not really what it seems - or am I wrong? It seems to me there must be a lot of creative fiction writers working for the Banks to help them attract new customers! All perfectly legal of course and explicitedly stated in their Ts & Cs - before anyone hops on that!

I'd like to know if any of these Banks' (savings/deposit) interest rates are compounded as they are with loan accounts and if not, why not?

I'm also wondering if the Anglo Irish _2 year_ _Regular Saving Plan at 6%,_ (apparently _only_ if the max of €1,000/month is saved) is actually guaranteed for two years as is suggested on their site? If it is true then could this be one of the best offerings (even for one year) and would it be better than leaving €12,000 on deposit in N.Rock for a year?



> From Anglo Irish Terms & Conditions
> *4.1* If you need to make a withdrawal, you can close your Account and the balance will be transferred to our Easy Access Deposit Account.
> *4.2* If you close your Account we will pay interest up to the date of closure at the applicable rate for the Regular Saver Account.


This suggests there would be no loss of interest incurred by premature closure of this account or am I wrong about this?
My interest in this is mainly academic but it's beginning to look as if a person would be better off buying shares in any of the Banks rather than saving their hard earned cash. Has anyone ever made a comparison between savings interest and share price increase over a short to medium term? I'd imagine it would be very interesting.


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## Zephyr (11 Jan 2007)

sherib said:


> I'm also wondering if the Anglo Irish _2 year_ _Regular Saving Plan at 6%,_ (apparently _only_ if the max of €1,000/month is saved) is actually guaranteed for two years as is suggested on their site? If it is true then could this be one of the best offerings (even for one year) and would it be better than leaving €12,000 on deposit in N.Rock for a year?



Looking at the terms and conditions for the Anglo account, there's no mention of the 6% rate depending on the max of €1000 being saved. The 6% is not guaranteed, but a minimum rate of 4.5% is given in the terms and conditions.

Just regarding the general idea that these accounts are not that great because the rate only fully applies to the first lodgement, how about the 18 month guarantee with the BoI product? This appears to be ECB + 2.75% (though I've yet to see any updated terms & conditions), At that rate by the time you saved 7 months at the max, you'll have a lump sum of €7000 getting the full rate for a year plus a reasonable return on amounts contributed in the months immediately after that. That still looks attractive.

Of course, I'm still not sure on the ECB + 2.75%. Has anyone got their hands on the updated terms and conditions yet and can confirm it's true?


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## Zephyr (11 Jan 2007)

Ok, just checked the BoI website and it does state quite clearly.

_If you continue to save, the rate you will receive on any new savings (subject to limits) for the first 18 months will be the ECB rate plus 2.75%. This is currently a rate of 6.25% (E.A.R. 6.25%)._

Pity they can't put the full terms and conditions for this product on their site though.


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## camlin90 (11 Jan 2007)

If OP invests 7500 in RaboDirect for one year they will get €285 net interest

If OP invests 7500 in RaboDirect initially, dripfeeds 750 per month to Halifax for 9 months, then reduces the payment to 250 per month for the final 3 months they will get €355.30 net interest

(assuming all rates stay as they are for the year)

So is the extra hassle worth the €70.30??


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## sally2007 (11 Jan 2007)

Zephyr said:


> Just regarding the general idea that these accounts are not that great because the rate only fully applies to the first lodgement, how about the 18 month guarantee with the BoI product? This appears to be ECB + 2.75% (though I've yet to see any updated terms & conditions), At that rate by the time you saved 7 months at the max, you'll have a lump sum of €7000 getting the full rate for a year plus a reasonable return on amounts contributed in the months immediately after that. That still looks attractive.
> 
> Of course, I'm still not sure on the ECB + 2.75%. Has anyone got their hands on the updated terms and conditions yet and can confirm it's true?


 
Have done a bit of research on the regular savings products on the market - BoI are offering ECB + 2.75% on 18 months regular savings up to €1,000 per month - interest is accrued daily on the balance in the ac and posted annually.
Not sure what happens after the 18 months on the rate but you have instant access so even if they drop the rate, you can take it out then!


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## long_boy (11 Jan 2007)

Yes I just opened a BOI account at 6.25% currently and tracking ECB+2.75% for 18months so this should improve further over time. These accounts are supposed to be for people depositing SSIAs and this rate applies to new, additional savings. Having said that I only realised that afer I opened my account and I didn't deposit my SSIA with them! 

In short I am expecting to receive the 6.25% on €1000 pm but since I haven't seen the ful T&C's I might be wrong but this is what I was told in the branch! Anyone know any better? The rate seems the best going at the moment - too good to be true!


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## Zephyr (12 Jan 2007)

Yeah, the 18 month guarantee at ECB + 2.75% looks very good, plus the freedom to make withdrawals or alter the amount lodged. For me it would be perfection itself if it allowed lodgements by EFT or standing order like the Anglo account instead of DD but I guess nothing's ever perfect so I'll overlook that minor point.

I'm a bit suspicious about Halifax, there seem to be a lot of conditions, and distinctions between 'bonus rate of interest' and 'interest' etc. Also, not offering the increased rate to existing regular savers at the end of last year doesn't inspire confidence either (I wouldn't expect them to offer it on the initial lump sum but new lodgements should have been eligible, I think). 

Even though Halifax has a higher rate, I can't see them keeping at that for too long once all the SSIAs have matured and most savers have selected their replacement regular saving accounts. An 18 month guarantee looks better to me than 0.4% extra interest right now.


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## sally2007 (12 Jan 2007)

long_boy said:


> Yes I just opened a BOI account at 6.25% currently and tracking ECB+2.75% for 18months so this should improve further over time. These accounts are supposed to be for people depositing SSIAs and this rate applies to new, additional savings. Having said that I only realised that afer I opened my account and I didn't deposit my SSIA with them!
> 
> In short I am expecting to receive the 6.25% on €1000 pm but since I haven't seen the ful T&C's I might be wrong but this is what I was told in the branch! Anyone know any better? The rate seems the best going at the moment - too good to be true!


 
BoI have opened up the regular savings part of their ac to non SSIA holders so you will still get the 6.25% on your €1,000 per month for 18 months!


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## long_boy (13 Jan 2007)

That's what I thought, I was just beginning to doubt myself as it seems by far the best option out there. Halifax and AIB are much more limited with their accounts and have far less potential for profit


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