Am I understanding this correctly : CAR rates?

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Fat Tony

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EBS have a [broken link removed] as below :

*2Years / €50,000 plus @ 8.50(gross) 4.16(car)

Are the rates in the Best Buys better than this e.g. 4.30% with Rabo vs. 4.16% with EBS or have I simplified this way too much??? (maybe these rates aren't so easily comparable?)
 
TheMasterG said:
Are the rates in the Best Buys better than this e.g. 4.30% with Rabo vs. 4.16% with EBS or have I simplified this way too much??? (maybe these rates aren't so easily comparable?)
Click to expand...
Nope, you have that just fine.

The Gross rate isn't comparable to any of the offers given by Rabo etc as they don't have term conditions (e.g. 2 years) placed on the accounts. The CAR is the correct rate to use for comparison of different offers as it shows the true return on an annual basis.
Best Buys said:
All rates are Compound Annual Rate (CAR) stated before deduction of Deposit Interest Retention Tax (DIRT).
Click to expand...

Another thing to consider which isn't detailed is the possible change in the Rabo rates (usually increase/decrease with ECB rates) vs. the guaranteed (or fixed) return of the EBS offer (i.e. the two offers are very different in the terms and conditions [and restrictions] so this needs to be considered).
 
Thanks, that clears things up a bit.

Good point about the rates may change, in the example it's actually Northern Rock with 4.30% at the mo' and as it's tied to ECB it will probably rise shortly.

Cheers :)
 
Also, with Rabo/NR etc you have the freedom to move your money at any time. I'm guessing the EBS offer it's tied for the full term (didn't actually look at the link or any conditions of the account). This may or may not be an issue in deciding the offer which suits your needs.
 
Yes, NR Rate is tied to ECB. But that doesn't mean that it will rise linearly with ECB rate. AFAIR NR just guarantee that it won't go below the ECB rate. So even if ECB rate goes up to 4% in June (as many are expecting), NR rate could stay static, or in theory, even drop from it's current 4.3%
 
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