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Regular saver vs lump sum (& dirt question)

  • 08-04-2009 6:45am
    #1
    petergdub
    Registered Users, Registered Users 2 Posts: 61 ✭✭


    I don't understand how regular saver accounts get much higher rate of interest than lump sums.
    e.g. AIB regular saver (300 / month max) pays about 5% while the best lump sum rate is 3 odd percent.
    Where is the catch with these regular saver accounts ?
    Surely the monthly amounts dont always receive the beneficial rate.

    Also is anyone exploiting these so called parent saver / family accounts which appear to dodge DIRT if the named child is under a certain age.


Comments

  • #2
    Toots
    Administrators, Business & Finance Moderators, Society & Culture Moderators Posts: 16,957 Admin ✭✭✭✭✭Toots


    You'll generally find that the higher rate only applies to the first €5000 (or other set amount) saved, any balances over that usually earn a lower rate.


  • #3
    stepbar
    Closed Accounts Posts: 6,123 ✭✭✭stepbar


    petergdub wrote: »
    I don't understand how regular saver accounts get much higher rate of interest than lump sums.
    e.g. AIB regular saver (300 / month max) pays about 5% while the best lump sum rate is 3 odd percent.
    Where is the catch with these regular saver accounts ?
    Surely the monthly amounts dont always receive the beneficial rate.

    Also is anyone exploiting these so called parent saver / family accounts which appear to dodge DIRT if the named child is under a certain age.

    It's 5% on each monthly lodgement and the balance already in the account (if any). i.e Your first lodgement (lets say 300 eur) attracts a rate of 5% for the month. The next lodgement brings the total balance to 600 eur and the interest accumulates based on a rate of 5% for the month and so on. Interest is then paid out and added to the principle at the time.

    RE: DIRT - this is not true. Link


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