APA Savings & Investments (LIA, Ireland) cheat sheet

Real return ≈ nominal return − inflation rate; use this to compare a deposit rate against price growth.

Compound interest: A = P(1 + r/n)^(nt), where n is compounding periods per year and t is years.

Rule of 72: doubling time in years ≈ 72 ÷ annual percentage return.

Gross vs net return: DIRT is deducted at source on deposit interest for Irish residents, so net return = gross × (1 − DIRT rate).

Simple interest accrues only on principal (I = P × r × t); compound interest accrues on principal plus reinvested interest.

Risk–return relationship: higher expected return generally requires accepting higher volatility or lower liquidity.

Diversification reduces unsystematic (asset-specific) risk but cannot remove systematic (market-wide) risk.

Equities historically outperform deposits over long horizons but with greater short-term capital risk; horizon length is the key matching rule.

Annual management charge on a fund reduces net return roughly one-for-one; a 1% fee on a 5% gross return leaves about 4% before other costs.

Credit unions are member-owned, not-for-profit cooperatives; members are both savers and borrowers (common bond membership).

Savings held with an Irish credit union are covered by the Deposit Guarantee Scheme up to €100,000 per depositor per institution.

Dividend on shares is declared at the AGM and is not guaranteed; it depends on surplus after covering costs and reserves.

A loan-to-savings ratio caps borrowing relative to a member's shares; the specific multiple is set by each credit union's lending policy.

Interest on a credit union loan is typically charged on the reducing balance, so early repayment cuts total interest.

Credit union reserves are a statutory buffer; the regulatory reserve requirement is expressed as a percentage of assets.

A member's shares may be used as security or offset against a loan, but shares cannot generally be withdrawn while pledged.

Credit union savings are shares, not bank deposits in the strict sense, though both fall under deposit guarantee protection.