Calculating interest due on deposit a/c

I'm am just comparing deposit accounts on permanent tsb's website.

I am interest in the online 6 month fixed term deposit a/c.

Per the website if I invest €10,000 (gross rate 2%, gross return 0.99%, AER 2.01% fixed)

I will receive a gross return interest amount of €98.63, which would then be subject to dirt tax @ 44% leaving me with €55.23 at the end of the fixed term?

However, I always thought this is the way the deposit account would work.

I invest 10,000, end of term I receive 2.01% interest which would be 10,000 x 2.01% = €201, the €201 would then subject to dirt tax @ 44% leaving me with €112.56 into my hand after the end of the fixed term?

Would someone throw some light please on how much interest would be due me if I invested 10,000 into permanent tsb's 6 month fixed term online deposit a/c.

Thanks.

without looking at the website, as you should have posted a link perhaps, the 98.63 looks like a 6 month return and the 201 is a annual figure .vorsprung durch technik
How did u arrive at Dirt being 44% I believe it is 41% and then you may have USC and PRSI on top of that, depending on your income and tax position.

Thanks, I cannot post links yet.

Oops my apologies dirt is in fact 41% alright.

ircoha said:

without looking at the website, as you should have posted a link perhaps, the 98.63 looks like a 6 month return and the 201 is a annual figure .vorsprung durch technik
How did u arrive at Dirt being 44% I believe it is 41% and then you may have USC and PRSI on top of that, depending on your income and tax position.

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There is no USC on deposit interest.

I calculate 59.23 EUR net after 6 months assuming 41% tax rate:
10,000*0.0201*(6/12)*(1-0.41) = 59.23 EUR.

Here's the PTSB link. Whatever their definition of "six months", they say the gross return is 0.99%, which matches the stated €98.63 to two significant figures.

1% for six months is equivalent to an annualised rate of 2.01%. The figure of €98.63 seems to be based on a deposit term of 180 days. Not sure why they are using 180 days. I would have thought 182 days would be more logical as it equals exactly 26 weeks and therefore avoids the possibility of deposits maturing over a weekend (bank holidays excluded).

It may depend on the day count convention that is used in the interest calculation: could be 360 rather than 365, or 30 day months etc
eg
[broken link removed]

ircoha said:

It may depend on the day count convention that is used in the interest calculation: could be 360 rather than 365, or 30 day months etc
eg
[broken link removed]

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Does that mean that you only receive 360/365ths of the interest that is due to you? Sounds like the kind of scam that banks would perpetrate on their customers.

'AER' should always use an actual annual 365 day count.

'Gross' can sometimes use a 360 day count and sometimes a 365 day count.

Always look at the AER rate.

Well, if they're quoting an AER of 2.01% but only paying interest of €98.63 after six months on €10,000, it better be payable after 180 days.

Appreciate if anybody can calculate what gross interest should be on a PTSB Interest First, Fixed Term Deposit a/c for 2 year term,advertised @ 2.5% AER, starting 5/12/13 and maturing 7/12/15, amount of €50K. PTSB statement states rate applied as 2.445%? .Thanks

50,000 * 0.025 * 2 = 2,500 EUR gross.

If it is an Interest First account you should have go the interest within 30 days of account opening and not at maturity.

Ciaran. Thks for that, thought it should be about your figure, even if interest was not compounded after first year, However ,I only received €2448.35 gross for the 2 years+ 1 day extra, due to maturity date occuring at weekend.So, was wondering if I had been short changed.Apparently PTSB have applied a rate of only 2.445%, despite origional agreement letter states AER at 2.5%. Anybody know if they are correct. Thanks.