Lump sum deposit or regular savings?

[Q apprendo]

Hi,

Currently I have money going into an AIB online saver account every month as well as a lump sum sitting in a current account.

I was wondering if it would be more worth my while if I took the money in the current account with the amount I currently have in the saver account and put it all into a state savings certificate (I was thinking the 5 and a 1/2 year one).
I won't need access to the money for that time (or at least, I think I won't to the best of my knowledge) so I was wondering if this would be a better option than waiting for the full year cycle to complete for the AIB online saver and invest it then?

The way I see it, if I'm lodging for example €1000 per month with AIB I'll get roughly €178.75 interest according to consumerhelp.ie (although by my calculations it should really be closer to €214.50?)
but with the state savings I would be getting around €216 per year tax free. Am I missing something here or is this the better choice for me as I don't require access?

If so, would buying several certificates instead of one earn the same amount of interest? (to allow me to withdraw with less penalty)

As an aside, does anyone know of any of the state savings products pay back interest throughout the year or do they all only pay out upon maturity?

Thanks!

 

[Lightning]

Current account:

The money in your AIB current account is earning you zero interest. However, AIB have minimum balance requirements in order to get free banking so if you take the lump sum out of your current account, and continue to use the current account, you might end up paying for banking.

For a current account, you are probably best off with PTSB, who give free banking if you deposit at least 1,500 EUR per month.

Regular Saver accounts:

Do you have an AIB Online Saver Account product or the AIB Saver Account product. The AIB Online Saver Account product pays 2.75%.

The return on the AIB Online Saver Account per annum:
6,000*0.0275*(1-.41)=97.35 EUR
Assumes that the variable rate does not decline, which it probably will.
Assumes that you stick to the strick T&C's rigidly.

For a regular saver product, Nationwide UK will pay you 4.00% for the first 1 year 3 months. KBC will pay you 3.50% on a less restrictive basis.

Term deposits:

For term deposits, some short dated products are worth considering to. You can switch when they mature, such as the KBC 1 year 2 months term deposit that pays 2.45%.

The long dated State Savings products pay low interest rates, you take on upward interest rate risk in the interim which the funds are de-facto 'locked'.

Perhaps, moving your lump sum into a KBC 1 year 2 months term deposit, additional savings into a NUK regular saver and moving your current account to PTSB might be the best strategy.