RTE article today - savings rates

[podgerodge]

Can someone explain the maths to me here, or am I reading the example out of context - I'm confused anyway.


"Permanent TSB announced a new product in recent weeks offering 1.25% on lump sums of €5,000 and higher for a period of 5 years.
That would generate a return over that period of around €1,130, which is quite a decent yield in the context of the current deposit rate environment."

Rates rising - why am I not making money on my savings?

For years, interest rates have been at rock bottom creating a relatively favourable environment for borrowing. Now that rates are rising, savers could have reasonably expected to finally start making a return on their deposits. But it has yet to show any signs of materialising.

www.rte.ie

 

[mct1]

"...quite a decent yield" is understatement of the year!

Someone got their sums wrong or else it's a misprint. I'd estimate €17,500 over 5 years would give you approx that return.

 

[ClubMan]

Looks completely incorrect.
€5k @ 1.25% compounded annually for 5 years yields a return of €320 gross or €213 after DIRT.

 

[llgon]

I thought that not mentioning Raisin and the rates available there was a huge omission.

 

[podgerodge]

Yes, had thought a couple of hundred at best. I was trying to see if they had referred to higher deposit examples earlier, which he did I think, but can't align it to this paragraph.

 

[NoRegretsCoyote]

Just more proof that most journalists and editors are innumerate.

 

[Brendan Burgess]

Just more proof that most journalists and editors are innumerate.

No. Just that there is a typo in an article published/updated on Sunday which was not proof-read as carefully as it should have been.

I suspect that they meant to say "on a sum of..." and this got edited out.

Brendan

 

[NoRegretsCoyote]

and this got edited out.

Okay, so just editors innumerate then

 

[peemac]

Just more proof that most journalists and editors are innumerate.

When you look at the "mortgage advice" some of them provide, your statement is sadly very correct.

When the Irish times allowed comments, I pointed out glaringly poor advice by one of their reporters on almost every mortgage query.

 

[Brendan Burgess]

Even Bonkers seems to be innumerate

 

[podgerodge]

That's the same figures as RTE article no?? Perhaps he lifted it from Bonkers

 

[ClubMan]

 

[noproblem]

Even Bonkers seems to be innumerate

View attachment 6878

To a simple person like myself I'd say that's a wonderful return of 1.25% on €5,000.00 over 5 years .
Going on the above you'll get €22,642.40 for €100k?
They're going to be very busy with that offer.

 

[Lisboa]

Bonkers have corrected their error and now have it as €320.41

RTE have also edited their article;

Permanent TSB announced a new product in recent weeks offering 1.25% on lump sums of €5,000 and higher for a period of 5 years.

That would generate a return over that period of at best a few hundred euro which would then be subject to DIRT at 33%.

 

[podgerodge]

Good, I had emailed him yesterday, perhaps that alerted him, and he ran off to Bonkers to ask them what they were at

 

[TOMTOM123]

Looks completely incorrect.
€5k @ 1.25% compounded annually for 5 years yields a return of €320 gross or €213 after DIRT.

Bonkers have corrected their error and now have it as €320.41

RTE have also edited their article;

night school might help hopefully and maybe aib and bank of ireland will increase the deposit rates as competion

Good, I had emailed him yesterday, perhaps that alerted him, and he ran off to Bonkers to ask them what they were at

 

[noproblem]

night school might help hopefully and maybe aib and bank of ireland will increase the deposit rates as competion

Bonkers have corrected their error and now have it as €320.41

RTE have also edited their article;

Raisin will get you €839.00 over the same period with the same amount

 

[tomdublin]

Most financial "journalists" these days spend their time rehashing corporate press releases and might not have heard of Raisin. Also, I suspect some might be planning to apply for jobs at bank PR departments once their publication has gone bust and thus want to ingratiate themselves by not mentioning foreign competitors.

 

[jim]

Raisin will get you €839.00 over the same period with the same amount

There ya go now @michaeloconnor2

 

[Brendan Burgess]

might have not have heard of Raisin.

Deposit rates are not important to most people. The differences are not that material. If someone asked me about deposit rates, I wouldn't have thought of Raisin.

I would say to check askaboutmoney to see what rates were available. But I would seriously question whether having large sums on deposit and fixed for 5 years was a good idea.

For this particular article, the journalist seems to have checked Bonkers and spoken to a few people. Maybe they didn't talk about Raisin to him? In any event, it is certainly not a rehash of a press release.

Brendan