I have an AIB online savings account. The deposit 7 one. I was wondering, what stops people just putting a huge lump sum a few weeks before the interest is put on and then withdrawing it again? Or is this common practice.
Nothing I presume but remember that you only get interest for the few weeks that the money was on deposit - you don't get the full 7% or whatever unless the money is on deposit for a full year! For example if the rate is 7% CAR then the daily rate is 7%/365 = c. 0.0192% and that is approximately what you earn (gross - i.e. before DIRT) for each day that the money is on deposit.
Its not importent. I thought i could put a huge sum of money that i need into the account a month before interest was due, and then once the interest was put on, just take it out. There are no penalties so i assumed it would be a good idea.
I trickle about 180 a month into the account as it is. So the interest on it would be tiny anyway
If it's a 7% regular saver account then I presume that there are limits on how much you can lodge each month or in total so that will presumably preclude lodging a large lump sum to this specific account.
But the general point still applies - you only get interest on money for as long as it is on deposit.
would the interest on 12 lodgements of €100 made on the first of each month for a year starting 1st January be greater than €1200 lodged on the 1st of December to the same account.
Answer - yes. If that was the question!
People lodge huge lump sums for very short periods all the time.
Is the account you are refering to the online notice deposit 7 account? If so the rate is 5.00% AER and it is not the same as the regular saver account. According to the terms and conditions the interest is calculated daily and paid twice per annum (in April and October).
I am confused what ye are talking about. I think Kye 1 is talking about AIB and the deposit on line account which pays 5%. I presume it is the new one requiring 7 days notice of withdrawal. The maximum one can deposit in this account is €10,000. The discussion then goes on to the regular saver account. As Kye 1 mentions AIB - best to stay away from theirs, it dropped from 7% to 4% at the start of the year.