State Savings - difference between total return and A.E.R.

H

HouseBuyer10

Registered User
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I was wondering if someone could explain the difference between total return and A.E.R. I’m looking at the different deposit options with StateSavings.ie (3, 5 and 10 year savings certificates) and it looks like the total return percentages are between 1 and 10%, but the A.E.R rates are not higher than the banks’ rates.
Thank you very much.
 
Total return is the total interest at the end of the 3, 5 or 10 years divided by the amount invested
A.E.R. = Annual Equivalent Rate is the yearly interest rate - this is what you use to compare the interest rates offered between different options on a comparable basis

Interest on State Savings are not taxed, whereas bank interest has DIRT tax deducted for most people
 
Thank you so much. That makes sense.
 
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