Is this a way of making the most out of Short/Long Term Deposit Rates?

absolutegroove

Q

Would I not be better of putting my money into a 3 month term deposit at 3.55% and letting it renew every three months than putting it into a 1 year account at 3.55%.

In simple terms:

3 months at 3.55% 4 times a year = 14.2% per year

1 year at 3.55% = 3.55%


I take it I must be missing something here

Jet Black

3.55 must be an AER rate. So its 3.55 divided by 4 not multiplied. But still would work out better putting it in the 3month one as the yearly one will only have the interest added at the end.

absolutegroove

Jet Black wrote: »

3.55 must be an AER rate. So its 3.55 divided by 4 not multiplied. But still would work out better putting it in the 3month one as the yearly one will only have the interest added at the end.

Yah it's AER for those rates.

Do you mean the actual return is 0.8875% per 3 months (3.55 ÷ 4)?

So in the end it's all the same i.e.

0.8875% per 3 months 4 times a year = 3.55%

1 year at 3.55% = 3.55%


Sorry but deposits is not my area.

Jet Black

Yes.

If for example you had 10k put it in for a year you will get 355euro.

If you were to put the 10k in each quarter at the end of the first 3 months you would have 10088.75. Next quarter you would have 10178.28. Next 10268.61. Finally 10359.74.

Its not a large difference as you can see but would be the better option.

Also this is before dirt.

absolutegroove

Jet Black wrote: »

Yes.

If for example you had 10k put it in for a year you will get 355euro.

If you were to put the 10k in each quarter at the end of the first 3 months you would have 10088.75. Next quarter you would have 10178.28. Next 10268.61. Finally 10359.74.

Its not a large difference as you can see but would be the better option.

Also this is before dirt.

Thanks Jet Black.