Which means that if you just withdraw interest annually you should lodge c. €14,200 to avoid breaching the €15K (or €14,999.99) limit which would put you on the lower rate. On the other hand you could withdraw interest monthly as it is paid and lodge closer to the €15K limit.
First Active e-savings account
- Thread starter mollser
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Just a quick maths questions, I have received €41.17 interest, which brings my total to €14,956.17.
Do I need to transfer money out now, if so how much? (to keep it below 15k) Or can I leave it for next's month's interest payments? and then transfer out?
Sorry if stupid question!
Do I need to transfer money out now, if so how much? (to keep it below 15k) Or can I leave it for next's month's interest payments? and then transfer out?
Sorry if stupid question!
By my reckoning you will earn ((€14,956.17 @ 5.22%) / 365) * 31) = €66.31 in January. €14,956.17 + €66.31 = €15,022.48 so you will be pushed above the €15K limit when the interest is added which will impact the interest earned until you reduce the deposit balance. Might be safest to keep a maximum of about €14,930 on deposit if you are collecting/transferring interest monthly in order to never breach the limit? That means a maximum of €66.19 interest per month (31 day month) which will being you to €14,996.19. On the other hand perhaps one could keep €14,999.99 on deposit and as soon as interest is paid transfer it out? Maybe you will just get the lower rate on the day that the interest is credited but once you transfer out you will revert to the higher rate? Not sure what the T&Cs say about this but I presume that interest is calculated daily but credited monthly?
I presume DIRT will be deducted so more likely the amount earned will be nearer to €53.05
Actually - I just checked my FA eSavings statement and they seem to credit the interest net of DIRT in a single transaction.
Same here. I also got my statement from EBS for their regular saver and they too have only detailed one interest figure
Fun query,
Did anyone who opened their eSavings account within online banking after a few weeks, get a prepaid envelope and instructions to return the following "enclosed forms":
"Prepaid envelope".
Yep thats it, no forms just the letter and brochures.
Doesn't affect me at all since it's been up and running for ages, I just was a little surprised to get this in the post.
Did anyone who opened their eSavings account within online banking after a few weeks, get a prepaid envelope and instructions to return the following "enclosed forms":
"Prepaid envelope".
Yep thats it, no forms just the letter and brochures.
Doesn't affect me at all since it's been up and running for ages, I just was a little surprised to get this in the post.
Hi Clubman or anyone else who can answer this - this is something I don't understand about accounts where the interest is not paid annually.
In your calculation, you use the full 5.22% rate to calculate the monthly interest payment. That would mean that the following month, they would get interest on the lump sum and on the interest already paid.
That means that an account where the interest is 5.22% paid monthly pays more interest over the course of a year than an account where the interest is 5.22% paid annually? Is this right? When I compare saving accounts I compare using the interest rates but should I be taking annual / monthly payments into consideration or am I missing something here?
Good point - my calculations are probably wrong so and I should probably be using some other rate when attempting to calculate the daily/monthly interest payments. On the other hand using the approach I mention above I can more or less reconcile the interest payments on my own FA eSavings account where I have not yet withdrawn any interest each month... Hmmmm.... Perhaps somebody else can comment on my approach?
maybe interest is only calculated on the balance minus any interest already paid?
The FA website shows the interest as:
€15,001 - €1,000,000 4.25% Gross 4.33% AER
€1 - €15,000 5.10% Gross 5.22% AER
Maybe they calculate the monthly interest using the Gross figure and over the year this has the effect of bringing it up to the AER figure?
€15,001 - €1,000,000 4.25% Gross 4.33% AER
€1 - €15,000 5.10% Gross 5.22% AER
Maybe they calculate the monthly interest using the Gross figure and over the year this has the effect of bringing it up to the AER figure?
Maybe - I'm not sure.
As far as I know this is incorrect and some people have reported that just hitting €15K puts you on the lower rate for the lot.
Another possibility.
I would imagine this is correct. For accounts that pay interest more than once a year, the gross rate should be used as the AER just shows how much interest you will earn in one whole year. You can't use AER to work out one months interest.
I did deduct DIRT.Hi clubman, sorry but did you take out the DIRT from your calculations as well in addition to use the gross int. rate?
I presume you mean the "nominal" rate? Anybody know what the FA eSavings 5.22% CAR/AER nominal rate equivalent is so? Does using the CAR/AER rate make my calculations just slightly or wildly inaccurate?
Update: oops - note to self: "did you even think of searching ClubMan"!
The nominal rate for the 5.22% CAR/AER [broken link removed]. Presumably if my calculations were done using this figure they would be (more) accurate?