Early withdrawal charge calculations

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

  1. carmel65

    carmel65 Registered 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 Amount to be withdrawn is €36,000.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    (1% x Amount withdrawn x Remaining term) ÷ 365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    Funding Loss is calculated using the formula (AxTxD) ÷ 365 where: A = the amount withdrawn T = the remaining term D = the difference in the prevailing market rate of interest for a term equivalent to the period remaining and the rate applicable at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    Also as I read it, I will loose the interest accrued to date on the amount withdrawn in addition to the withdrawal fee, seems very penal.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

    CiaranT .

    Posts:
    4,422
    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. carmel65

    carmel65 Registered 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

    CiaranT .

    Posts:
    4,422
    Sometimes a good sob story as to why you need the money early helps your case!

    Get the exact amount in writing.