Interest calculation on Regular Saver

C

creditworthy

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God morning, I was wondering if someone would explain to me how the interest is calculated on a Regualr Saver ? I deposit 1000 monthly with AIB at 2% , and am wondering if that works out better than putting 12 k on a 1 year fixed rate deposit account,
Thank you ,
M.
 
Gross interest on regular saving of €1000 @ 2% for 12 months = €130 approx
 
Assuming 1% on the lump sum deposit, the interest amounts will be about the same. 12k @ 1% for 1 year = 120 gross interest.

BTW 2% regular saver isn't great, you can get 3% at EBS or 3.5% at KBC. Take a look at the best buys thread for more information.
 
creditworthy said:
God morning, I was wondering if someone would explain to me how the interest is calculated on a Regualr Saver ? I deposit 1000 monthly with AIB at 2% , and am wondering if that works out better than putting 12 k on a 1 year fixed rate deposit account,
Thank you ,
M.
Click to expand...

You are better off choosing a bank other than AIB for your deposits. Anyway, calculations below:

Term deposit: 12,000*0.004*1*(1-0.41) = 28.32 EUR interest.
Regular Saver (with just 1 account): 12,000*0.02*1*(1-0.41)*(6/12) = 70.80 EUR interest.
Regular Saver (with 8 accounts): (8,000*0.02*1*(1-0.41)*(12/12))+(4,000*0.02*1*(1-0.41)*(11/12)) = 137.67 EUR interest.

With AIB you can open up to 8 regular saver accounts, 4 online and 4 in-branch. Set up 8*10 EUR standing orders to the 8 accounts per month. Then in month 1, deposit 990 EUR into each of the 8 accounts. In month 2, deposit 990 EUR into 4 of the accounts. You then end up with more interest.

Note:
Assumes 41% tax applies.
Assumes AIB keep their rate at 2.00% AER for the next year. I would speculate that it might drop.
 
Ciaran T, I was wondering why any bank other than AIB better for deposits ? I dont keep up to date with banks etc but regularly pop on here to be best informed ! Am with KBC with a Smart Move account @0.7% .... not alot better elsewhere , and Regular saver @2.5%, am in the process ofvre organising things ,
Thanks , M.
 
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