- May 27, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Introduction to Investing and Banking
Hello! I am completely new to investing and banking and would like to learn more about interest rates and how to calculate the actual returns.
## Understanding Interest Rates and Calculating Returns
I have noticed that TR offers a 4% interest rate, but I am unsure about the correct method to calculate the returns. I would appreciate some guidance on this matter.
## Using AI Legalese Decoder to Calculate Returns
With the help of an AI Legalese Decoder, you can easily calculate the returns on an investment. For example, if you were to deposit 10,000 EUR into an account with a 4% interest rate, the AI Legalese Decoder can help you determine how much you would receive after 6 or 12 months.
## Conclusion
Thank you for your assistance in helping me understand how interest rates work and how to calculate returns on investments.
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It’s usually over a year. So 4% of €10k = €400
But they pay it out monthly or weekly and that’s where compound interest comes in. Let’s say they pay out €33 interest in the first month (that 4% of €10k divided by 12 months). You’ll now have €10.033, so the next month will be 4% of €10.033 divided by 12, so €34. Now it’s 4% of €10.077 divided by 12 and so forth..
Basically, look for a compound interest calculator.
EDIT: it’s more like 33.30 and then 33.40 but you get the idea I hope
EDIT:
Assuming monthly compounded interest:
https://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php
– 6 months: €201.67
– 12 months: €407.42
My recommendation if you max out and deposit 50k, like I did : move the dividend to XEON etf or reinvest somewhere else as there is no incentive to keep more than 50K in the account. Good luck!
Trading 212 gives 4.2% paid out daily . I’ve split mine between TR and trading 212
When a brokerage platform like Trade Republic offers a 4% interest rate, it means they pay you an annualized interest rate of 4% on the cash balance in your account that is not invested in securities. This interest accrues over time based on your average daily cash balance. So, if you have €1,000 in uninvested cash in your Trade Republic account, you could potentially earn €40 in interest over the course of a year, assuming the interest rate remains constant and your cash balance doesn’t change significantly. However, it’s important to note that interest rates can fluctuate and are subject to change by the brokerage. Always check the latest terms and conditions for the most accurate information.
They calculate it for each day. So if you have 10k today, you’ll get 10000×0.04/366 for that day. If you transfer another 6k to your TR account, you have 16k and then you get 16000×0.04/366 for the next day. This is done for each day of the month and when the month is over, they pay the sum of all these daily gains. But if you plan to just make one deposit of 10k and then not touch the account, it’s basically just 4% of 10k divided by 12 months (not exactly because of monthly compounding and months being of different lengths, so it’s a little bit more than 4% annually, but negligblely small difference on 10k, not even 10 euro difference annually).
Keep in mind that the ECB will probably lower the interest rate later this year (no one knows when, but it’s coming) and then TR will also lower their interest rate.
Edit: they divide it by 360 days, not 366 (https://traderepublic.com/en-nl/interest)
I’ve read here and elsewhere that some people had trouble with TradeRepublic, e.g. missing deposits, missing payments, non-existent customer service etc. Are these just idiosyncratic and isolated incidents, or TradeRepublic is just that unreliable? Is it a good place to open a fixed-period saving account? I’m living in Spain.
You will get 4% for a few months, then the rate is lowered. Check on their homepage and keep check with the actual rates, another bank did the same: advertise a high rate, then lowering it and I assume hoping that customers won’t realize and are too lazy to switch
This is a leap year so they will divide the days of each month by 366 days and you get 4% over 366 days instead of 365 days with monthly compound interest
Hi, you’ll get 4% for 12 months
10k *0,04 = 400€
For six months it’s half.. 200€
Depending on your country taxes you will have or not, to pay them accordingly.