# Calculating interest with INBS Regular Saver



## VanZan (25 May 2008)

Re Irish Nationwide Regular Saver @ 7.35%: What would be a year's interest on €150 per month? I tried using one of the calculators but I'm doing something wrong. I wonder would the interest be so small as to not be worth the hassle?


----------



## Duke of Marmalade (25 May 2008)

€78.25 after DIRT


----------



## Colblimp (25 May 2008)

Carrying on with this, what would be the interest after 10 months saving €200 per month, after DIRT, of course?  Ta very much...


----------



## VanZan (25 May 2008)

Yes I should have said 10 months as well....d'oh!


----------



## Duke of Marmalade (26 May 2008)

€57.53


----------



## Duke of Marmalade (26 May 2008)

Colblimp said:


> Carrying on with this, what would be the interest after 10 months saving €200 per month, after DIRT, of course? Ta very much...


€76.70


----------



## ClubMan (26 May 2008)

vanzan said:


> Re Irish Nationwide Regular Saver @ 7.35%: What would be a year's interest on €150 per month? I tried using one of the calculators but I'm doing something wrong. I wonder would the interest be so small as to not be worth the hassle?


You can estimate the gross return on such regular saver accounts using  this calculator.


----------



## rmelly (26 May 2008)

Harchibald said:


> €78.25 after DIRT


 
Harchibald, can I ask how you came up with this figure?

My simple rule of thumb for these accounts (ignoring initial lump sum) is total paid in for the year divided by 2 (in this case 900), then calculate the interest based on this figure, less DIRT.

I came up with €52.92 (for the original 150 for 12 months @ 7.35)


----------



## ClubMan (26 May 2008)

Using the calculator linked to above I get €66.37 gross or €53.10 for 10 monthly contributions of €200 @ 7.35%. However this may not be totally accurate since it is using the _CAR _rate rather than a more correct (?) nominal rate?


----------



## Duke of Marmalade (26 May 2008)

rmelly said:


> Harchibald, can I ask how you came up with this figure?
> 
> My simple rule of thumb for these accounts (ignoring initial lump sum) is total paid in for the year divided by 2 (in this case 900), then calculate the interest based on this figure, less DIRT.
> 
> I came up with €52.92 (for the original 150 for 12 months @ 7.35)


I don't know how I came up with these figures. I think the batteries in my calculator are a bit worn out.

Using _Clubbie's_ calculator. First thing is to decide what is the effective compound rate net of DIRT. Without knowing the precise mechanism of the account let us assume that interest is added monthly net of DIRT. That would be an effective monthly interest rate of 7.35/12 x .8. Compounding this over 12 months gives 6.04% and that is what I put into _Clubbie's_ calculator.

150 for 10 months = 41.01 interest
150 for 12 months = 58.36
200 for 10 months = 54.69
200 for 12 months = 77.81

_rmelly_, your simple rule of thumb is fine but would be more accurate still if you multiplied by 13/12 to allow for the fact that on average you are invested for 6.5 months i.e. the average of 12 months for the first instalment and 1 month for the last.


----------



## VanZan (26 May 2008)

ClubMan said:


> You can estimate the gross return on such regular saver accounts using  this calculator.



I found a link to that calculator on a forum search. Yet I'm using it wrong. It's the "Future Value" one yes? I put 150 in for "Total invested each month", 1 Year(s) in for "[FONT=verdana, arial, helvetica][FONT=verdana, arial, helvetica][FONT=verdana, arial, helvetica]Number of month/years to aquire sum" and 7.35 in for "[/FONT][/FONT][/FONT][FONT=verdana, arial, helvetica][FONT=verdana, arial, helvetica][FONT=verdana, arial, helvetica]Interest rate on savings (%)". However I get a result of $1870.88!!! lol I'm doing something wrong obviously [/FONT][/FONT][/FONT]


----------



## ClubMan (26 May 2008)

vanzan said:


> [FONT=verdana, arial, helvetica][FONT=verdana, arial, helvetica][FONT=verdana, arial, helvetica]However I get a result of $1870.88!!! lol I'm doing something wrong obviously [/FONT][/FONT][/FONT]


Yes - you're misreading the results:

The €1870.88 returned comprises (12 x €150) = €1800 capital + €70.88 gross interest (€56.70 net of _DIRT_).

Notes: (a) obviously the $ sign is just a display issue and can be replaced with € and (b) as I mentioned above the precise details of the interest earned will depend on the monthly rate applied and how compounding is done (e.g. I'm assuming compounding gross but that is probably wrong) etc. but the above should be a pretty good approximation.


----------



## rmelly (26 May 2008)

Harchibald said:


> _rmelly_, your simple rule of thumb is fine but would be more accurate still if you multiplied by 13/12 to allow for the fact that on average you are invested for 6.5 months i.e. the average of 12 months for the first instalment and 1 month for the last.


 
you're right - I was thinking that afterwards.


----------



## VanZan (26 May 2008)

ClubMan said:


> Yes - you're misreading the results:
> 
> The €1870.88 returned comprises (12 x €150) = €1800 capital + €70.88 gross interest (€56.70 net of _DIRT_).
> 
> Notes: (a) obviously the $ sign is just a display issue and can be replaced with € and (b) as I mentioned above the precise details of the interest earned will depend on the monthly rate applied and how compounding is done (e.g. I'm assuming compounding gross but that is probably wrong) etc. but the above should be a pretty good approximation.



Many thanks ClubMan...wonderful forum you have here.


----------

