Interest on deposits.

firstly, happy new year all,..yes, I am posting about 5 mins after midnight, the joys of working on this holiday.But I must say, I have enyoyed having this forum for company and learned some great things, thanks to all posters, especially the regular posters who continue to be a font of great info.

My question concerns the interest you earn on deposits ( both regular and lump sum).

Do you only obtain your interest at each interval? What I mean is, if you close an account, after 10 months and the interest is only given by the bank every 12mths, does than mean, tough luck, you don't receive any interest.??


What I am trying to learn is do I need to manage my accounts to such an extent that I need to learn when the interest is applied so as not to lose out on any interest. I have lump sum with rabo and First Actives e-savers and an with AIB I have a regular saver a/c and the new online lump sum.

thanks in advance for any adn all help,...I will add that I have searched this site to find the answer before I posted this query and can't find a clear answer.

cheers & heres to a great 2008

Re: Interst on deposits.

Hi sunnyside,

I look at the previous treads you can see I already read your mind some days ago. There a tread on the lump sum deposits and one on the regular savers.

The T&Cs of any account should state when interest is paid. Some accounts (e.g. NR) offer the option of annual or monthly payment with the latter offering a slightly lower rate than the former. In some (many?) cases even if you choose annual payment but withdraw money or close the account before the year is up you don't lose out and are paid the full amount of interest accrued.

Most financial institutions pay daily interest. This interest is calculated daily but not credited to the account until it is due or when the account is closed. Make sure when you close an account that you specify quite clearly that you want the account closed. A lot of people just withdraw the capital assuming that they will get their interest. It is easier for the person behind the counter to reduce the balance to nil rather than close the account. Technically the account is still open when the balance is nil so they haven't actually lost the account.

Thanks guys for the info.

For the 2 popular AIB a/cs. The regular saver and 7 day notice online lump deposit a/c. Interest is added twice a year, April and October.

On the regular saver a/c, I am right in thinking its gone from 7% a year down to 4% from the 1st of Jan (today!)

Cheers,

Interesting comment re AIB regular saver dropping from 7.10% to, quote from their website, ''match the ECB rate from 01/01/08.'' As Sunnyside states this means the regular saver is now 4% - very unattractive. I would say this has gone unnoticed with many AIB regular savers.