Drip-feed or lump sum?

Have €20,000
Option A) Lump sum in Anglo irish Bank I year fixed rate at 5%
Option B) Drip feed Anglo irish bank regular saver at 7%, max. €1000 a month

Which one works out better? Thanks.

For a lump sum you have in hand, the 5% acc. works out better. Drip feeding at 7% pm for a year works out at an average return of 3.32%.

Slim

PS: For new funds that come to hand, it is worth paying into regular savings acc.

Alternatively put c.€14K in First Active E-Saver at 5.22%, c.€6K in Halifax FlexiSaver at 5.15%, and drip feed from these accounts to Anglo.
This would give you a higher return

But... you have to put the lump sum somwhere to drip feed from - so you need to add on the interest you make on that too !

(this post was delayed due to internet connection going down)

sapmanie said:

Have €20,000
Option A) Lump sum in Anglo irish Bank I year fixed rate at 5%
Option B) Drip feed Anglo irish bank regular saver at 7%, max. €1000 a month

Which one works out better? Thanks.

Click to expand...

Drip feeding from a high interest on demand account into a regular saver is best.

When people say it only works out at 3.32%, they are completely ignoring the fact that it is earning interest in the other account before it goes into the regular saver account.
Say it is drip fed from a 5% account, the €1,000 is first earning 5% pa and once it is drip fed it is earning 7% pa, so you end up with somewhere in between.
It would only earn 3.32% if you kept the €20,000 at home and then used the regular saver. You need to use a lump sum account in conjunction with it.

This has been corrected many times, but the same poster seems to say it every time.