Irish banks are paying savings rates four times lower than the eurozone average, the Irish Independent is able to reveal.
At a time when mortgage interest rates are skyrocketing, the average payout on savings is just 0.17 percent – or $17 on a $10,000 annual deposit – compared to a eurozone average of 0. 69 percent.
Banks were urged to give savers a break after interest rates on savings in this country turned out to be among the lowest in the euro zone.
And the tariffs offered have hardly changed in the last four years.
This is despite a sharp rise in European Central Bank (ECB) interest rates in recent months and a rise in savings rates in the rest of Europe.
According to the central bank, the Irish average rate is four times lower than the euro zone average of 0.69 percent.
Deposit rates in excess of 1.10 percent are now being offered in some countries, such as Italy and France.
Meanwhile, a 33 percent tax must be paid on all interest earned from savings with a bank or credit union in that country.
The head of the Irish Consumers’ Association, Michael Kilcoyne, accused the banks of “behaving like bandits”.
He said we had some of the lowest interest rates on savings in the eurozone but some of the most expensive mortgage, credit card and loan rates, and urged banks to pay savers reasonable rates.
“They look like bandits because they pay savers little or nothing and yet have some of the highest mortgage, credit card and personal loan rates in Europe. It’s time they paid more interest on savings,” he said.
Many of those with bank savings are older and dependent on fixed incomes such as pensions, Mr Kilcoyne
Irish households have a record high of almost €150 billion in savings in Irish banks.
It has been calculated that Irish banks will make €1 billion in deposit and loan spreads by depositing this money with the ECB.
This is because the ECB is now paying banks 1.50 percent interest on money deposited with it.
An analysis of the price comparison portal Bonkers.ie for the Irish Independent shows that the best interest rate for regular savers among the main banks is currently only 0.40 percent AER (Annual Percentage Rate).
This is offered by Permanent TSB for savings of up to €50,000.
Bank of Ireland offers only 0.25% AER for amounts up to €15,000 with their GoalSaver account.
And AIB, the country’s largest bank, is currently offering just 0.10 percent, Bonkers.ie found out.
The ESB and AIB have child savings accounts that offer 1pc VRE.
However, the ESB account has a maximum balance of €5,000 while the AIB account has a maximum balance of €1,000.
For those with a lump sum, Permanent TSB is now paying 1.25 percent on its five-year term deposit after raising its deposit rates last week.
But AIB pays just 0.25 percent on amounts over €15,000 with its new one-year fixed deposit account, while Bank of Ireland offers very low yields, said Bonkers.ie’s Daragh Cassidy.
Since July, the ECB has raised both its deposit rate and its key interest rate.
Banks in this country have responded by raising some of their fixed mortgage rates.
Slightly higher interest rates are available through State Savings products and returns are free of dirt tax, although the rate has been reduced by the government in recent years, Mr Cassidy said.
He said that Irish mortgage rates had become somewhat more attractive relative to the rest of the euro zone in recent months as the main banks held back from passing on any ECB rate hikes.
While this is welcome, it is largely at the expense of savers
https://www.independent.ie/business/personal-finance/banking/irish-banks-are-paying-savers-some-of-the-worst-rates-in-europe-42162700.html Irish banks pay savers some of the worst interest rates in Europe