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Interest owed = 127.5
Less Dirt @ 20%
You can get 5% gross CAR on demand deposits up to €10K with Rabo with no strings attached.Best to leave it alone - it is now earning 4.50% and if you keep within the withdrawal guidelines you will earn an added interest bonus.
Thanks - that's a very clear explanation of how these savings rates work. So these 'great' savings rates of ~ 7% are in reality half that in real terms. Does that mean that in the second year 7% is paid on the full first years savings or whatever the rate will be then (probably much less)?Originally Posted by Howitzer
This is a common misconception with regular savings accounts.
On average your payments receive interest of 4.25% / 2 = 2.125%
Does that mean that AIB's Online Personal Savings Plan with bonus is the best on offer? I find it quite difficult to figure out how these rates are calculated - just not my forte. Unless I'm doing something wrong, it seems you have to know the final sum in advance to work out the interest using that calculator posted by ClubMan.Originally Posted by Oldtimer
I presume it is a personal saving plan account with AIB i.e. up to €1000 per month for 5 years with bonus interest if withdrawals within terms and conditions.
Clubman is correct but bear in mind the positive side of this account. In the first year, if withdrawals kept to two, the interest is 4.50% plus 10% of that = 4.95%. In second year the added bonus is 20% of interest rate and so on to year 5 when interest bonus is 50% of rate at that time. Now that poster has started and assuming intends to continue I think it better to stay with this account.
Your bonus will be added to your account with your interest in April:http://www.aib.ie/servlet/ContentServer?pagename=ROIPersonalPortal/AIBContent_C/pp_service&c=AIBContent_C&cid=1136826340216&channel=P003
- Year 1, a bonus of 10% of interest earned is paid
- Year 2, a bonus of 20% of interest earned is paid
- Year 3, a bonus of 30% of interest earned is paid
- Year 4, a bonus of 40% of interest earned is paid
- Year 5, a bonus of 50% of interest earned is paid
.4.50% plus 10% of that = 4.95%
Unless I'm doing something wrong, it seems you have to know the final sum in advance to work out the interest using that calculator posted by ClubMan.
Thanks - that's a very clear explanation of how these savings rates work. So these 'great' savings rates of ~ 7% are in reality half that in real terms.
If you no longer have a mortgage then the HICP rather [broken link removed] might be more relevant inflation as mentioned recently in another thread. More on the two stats here:To calculate the return in real terms you would need to adjust for inflation which ran at 4% last year. See this article for an explanation.
Thanks DM, I hadn't forgotton about inflation - just didn't want toOriginally Posted by Demoivre
To calculate the return in real terms you would need to adjust for inflation which ran at 4% last year.
That's terrific - I wasn't using the right calculor - thanks a mill. However, when I enter the same figures (100, 12 months, 5%) and final sum from Future Value into the Compound Annual Rate box, it gives Compound Annual Rate (%) as 1132.25. That doesn't make sense, so what am I doing wrong again or what is the explanation? At least I did recognise that AIB's 'bonus' was on interest earned and not on the %. That would be too good to be true. I'm really very grateful to all the helpful posters on AAM. Happy Easter everyoneOriginally Posted by Hattrick_12a
Are you using the right one?
If you are using the Future Value calculator, if you are saving 100euro for 12 months at 5% gives $1232.25, try it?
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