# Early withdrawal charge calculations

Discussion in 'Deposits' started by carmel65, Dec 6, 2016.

1. ### carmel65Registered User

Posts:
11
Hi
I just wanted to check to see if someone could help me understand how the early withdrawal fee is calculated on a Permanent TSB one year fixed deposit account.

I naively thought I would just loose the interest payable, but the figures I have been quoted by TSB are much higher than the interest I would have earned on the account even if I decided to leave the full amount on deposit for the full year?

The interest rate is .75%. Amount to be withdrawn is €36,000. The remaining term is approx 9 months.

The general t&c say

The early withdrawal charge is

(1% x Amount withdrawn x Remaining term) ÷ 365

or

an amount equal to the funding loss (if applicable), whichever is the greater.
A minimum of €20 applies.

Funding Loss is calculated using the formula (AxTxD) ÷ 365 where: A = the amount withdrawn T = the remaining term D = the difference in the prevailing market rate of interest for a term equivalent to the period remaining and the rate applicable at the date of opening the account.

Any idea where the 1% rate comes from, when the interest rate on the account is .75 gross (much less after DIRT)?

Also as I read it, I will loose the interest accrued to date on the amount withdrawn in addition to the withdrawal fee, seems very penal.

Many thanks

2. ### CiaranT.

Posts:
4,495
Have you spoken to PTSB? Have you asked PTSB what the early withdrawal charge will be in your case?

Often, the T&C's say one thing and in the real world charges might not apply charges.

3. ### carmel65Registered User

Posts:
11
thanks CiaranT, yes I have been through the process with the manager in the PTSB, verbally I have been told that this is how it will work and I am waiting for a final written confirmation.

4. ### CiaranT.

Posts:
4,495
Sometimes a good sob story as to why you need the money early helps your case!

Get the exact amount in writing.