How to calculate interest?

Suze456

Registered User
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I'm looking at the account below. Interest is paid annually on 20 November. Can save variable amounts so would the interest be calculated on what's in the account on 20 Nov or an average of what was in the account? Is there any advantage in saving money monthly verus putting in a lump sum on 1 Nov?

PermanentTSB Online Regular
1.25% on €1 to €50,000.
0.15% on the whole amount if the balance exceeds €50,000.01+
  • Minimum per month: €1 per month.
  • Maximum per month: €1,000 per month.
  • Access: Instant access.
  • Fees: None.
  • Lodgement method: Ad-hoc lodgements at the customers discretion. No mandatory standing order requirement.
  • Minimum period: None.
  • Interest type: Variable.
  • Interest payment frequency: Annually. Annual interest is credited to the account on the first business day after the 20th of November.
 
Probably neither is the answer to your first question.

Interest is normally calculated on a daily basis but depending on account type, none would be calculated on just what is in the account on a fixed date unless maybe a term deposit for a lump sum which has been tied in for the year.

If you lodge a lump sum on 1 Nov you are only going to get 20 days interest and the max lump sum will be 1,000 as that's the monthly max lodgement.

The whole point of this account is to make regular payments and not lump sum.
 
I'm looking at the account below. Interest is paid annually on 20 November. Can save variable amounts so would the interest be calculated on what's in the account on 20 Nov or an average of what was in the account? Is there any advantage in saving money monthly verus putting in a lump sum on 1 Nov?

Interest is accrued daily. 1/365 is accrued daily. If you start saving on 1 November, 20/365 will be multiplied by the rate by the amount to give you your interest payment.
 
Thanks all. So if I withdrew everything on 19 November, I would still get paid interest on what I had deposited all year?

Never understood how they calculated it, trying to get my head around it :)
 
Yes, interest is calculated on a daily basis on the balance in the account on that day but the accumulated interest figure is only added to the account once a year.
 
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