best way to use savings schemes to repay parents

[mim45]

My parents in law kindly lent us €96,000 two years ago to purchase a site. As we have now built our house we are looking for the most sensible way to repay them. We could of course remortgage and raise the funds this way but would prefer to organize monthly payments which they could then use to to put towards a saving account.

I have looked into this a little bit and was considering the following:

€10k lodgment into Rabo savings account with initial lodgment of €10k and monthly savings of €350 pm
Total contributed over 5 year period - €31k
Interest earned €4,679.40

Halifax lodgment of €350.00 with monthly savings of €350 pm
Total contribute over 5 year period - €21,350
Interest earned €4209.80

this would leave €44,010
€10k of which we could raise immediately

The balance of €33,010 we would prefer to pay over a longer period in order to keep monthly outgoings down as much as possible.

My main concern is the in laws are due to retire in 3 years and have no pension provisions, they are mortgage free but I would like ensure they have a steady stream of savings to ensure they have a steady return over the years to come.

Any suggestions most appreciated

 

[ClubMan]

There are numerous threads about how to combine one or more demand or term lump sum and regular saver accounts to maximise interest returns. Do a search for these and check out the lists of best deposit accounts/rates on offer in the Financial Best Buys forum.

How exactly are you calculating the interest returns above? Bear in mind that 12 monthly contributions of €350 @ say 7% is not the same as 12 x €350 = €4,200 @ 7%. And are you taking account of DIRT and compounding net of this tax?

You don't mention the likes of NR (5% on €1K+) or some of the 7%+ regular saver account offerings above.

 

[mim45]

Hi Clubman,

Thanks for the speedy response, I took both calculations from Rabo and Halifax websites, as you have rightly pointed out I did not take dirt tax into consideration. I will check out financial best buys forum.

Thanks again