AIB "18 month Fixed Term Deposit Account promotion"

[InfoSeeker]

My query is a simple one and just want to see if my logic is correct.

Details of the product are at [broken link removed]

From reading this it seems that you lodge an amount between 6k & 100k into the account before Oct 3rd.

No more lodgements can be made.

Gross Interest Rate is 6.75 and there are 2 interest payments, ie open Account on Oct 1st 2007 then interest is paid on Oct 1st 2008 and also on maturity of the account on April 1st. (I know there is an option for it to be paid more regular but this results in less interest being received).

The interest rate is fixed which might not be good in the current environment but can you let me know if the following is correct.

If I lodge 20k to this account then is it as simple as the following:
Oct 1, 2008 -> Interest Paid is 20,000 x 0.0675 = 1350
This is subject to Dirt @ 20% currently which = 270 so net interest = 1080
Balance now is 21,080

Final Interest Paid on April 1st which would be:
21080 x 0.03375 = 711.45
Dirt @ 20% = 142.29
Net Interest Received = 569.16

Final Sum Receivable = 21080 + 569.16 = 21649.16?

 

[paddyodoors]

I think that the 6.75 is for the whole 18 month period - the Annual equivalent rate shows as 4.44%

I suspect that what is more likely is as follows (not including dirt impact):

20,000 Oct 2008 *4.44 = 20888
20888 * 2.22 (half year) = 21351


Open to correction

 

[InfoSeeker]

I would think you are right as the website does state that the AER is 4.44%

Thanks for the response.