Irish Banks Announce Interest Rate Increases: Savings Rates Soar

Discover the latest interest rate increases for savers as Irish banks, including Bank of Ireland, AIB, Permanent TSB, and State Savings, raise their deposit rates. Start saving today and benefit from these higher rates.

Bank of Ireland, AIB, Permanent TSB, Prize Bonds and State Savings have all recently announced significant increases in their deposit rates for savers. This news comes as a relief to many savers, as political pressure has been mounting on savings institutions to improve the rates they offer. With Irish savers having more than €150 billion on deposit in Ireland's banks, this rate increase is a welcome change.

The Eurozone has seen many banks offering interest rates of up to 4 per cent, and although Bank of Ireland, Permanent TSB, and AIB have all announced increases in the interest rates available to savers, they are still not as high as the rates seen in some other countries. Nevertheless, these increases are a step in the right direction for those looking to maximize the returns on their savings.

Let's take a closer look at the current savings rates being offered by Prize Bonds, State Savings, AIB, Bank of Ireland, and Permanent TSB.

Prize Bonds, managed by the National Treasury Management Agency (NTMA), will be increasing their interest rate starting from 1 October. The variable rate used to calculate the prize fund will rise to 1 per cent of the total value of Prize Bonds outstanding. This increase will lead to the prize fund almost tripling in size, with the top monthly prize rising to €500,000. Previously, the top prize was €250,000 every quarter. In addition to this substantial increase, there will also be a top weekly prize of €50,000, as well as 20 prizes of €1,000 and €500. The remaining prize fund will be distributed in €75 prizes.

Moving on to State Savings, their products are known for being tax-free, and they are also increasing their rates for new fixed-term products taken out on or after 1 October. The Three-Year Savings Bonds' rate will be increased to 4 per cent (1.32 per cent AER), the Five-Year Savings Certificate will be increased to 9 per cent (1.74 per cent AER), the Six-Year Instalment Savings rate will be increased to 10 per cent (1.75 per cent AER), and the 10-Year National Solidarity Bond rate will be increased to 22 per cent (2.01 per cent AER). It is important to note that the Four-Year National Solidarity Bond will cease on 30 September with no new issue, but those who have already purchased this bond will continue to receive the fixed rates. Existing State Savings customers who have already purchased savings products won't be impacted by these new interest rates. As of the end of July 2023, the total value of State Savings was estimated to be €24.9 billion.

Shifting our focus to AIB, they recently announced an increase in their deposit rates. Starting from 12 September, the Regular Savers and AIB Fixed Term accounts will have interest rates of 3 per cent. AIB's Online Saver will also see an increase to 3 per cent per year for three years for amounts ranging from €10 to €1000 per month. The AIB Junior and Student Saver rates, as well as EBS Family Savings rates, are all increasing to 3 per cent. The EBS Children and Teens Saving rates will rise to 2.5 per cent. The AIB Online Notice 7 Deposit account will increase to 0.75 per cent, and the AIB Demand Deposit account and EBS Instant Access account rates will increase to 0.25 per cent. Additionally, AIB's term deposits, which require a minimum lump sum of €15,000, will also see an increase. The Two-Year Term Deposit will be raised to 3 per cent, the One-Year Term Deposit to 2.5 per cent, and the Six-Month Term Deposit to 1.5 per cent.

Lastly, Bank of Ireland is also making changes to its savings rates from 8 September. Their SuperSaver deposit product will increase to 3 per cent for the first 12 months and then revert to a rate of 2 per cent on balances up to €30,000. Existing customers will automatically benefit from this rate. The MortgageSaver product will also see an increase of 2 per cent on balances up to €15,000, with a rate of 0.5 per cent applied to amounts above that threshold. For the RegularSaver product, the rate will increase to 2 per cent on balances up to €12,000, and a rate of 0.5 per cent will apply to money above €12,000. Bank of Ireland will offer a new six-month savings account with an interest rate of 1.5 per cent, while their one-year and two-year term deposit accounts will have a rate of 2 per cent. Additionally, customers who choose these new saving options will also have access to up to 10 per cent of their initial balance without any penalty. The 31-day notice interest rate will increase to 1 per cent, and for on-demand deposits, the interest rate will rise to 0.01 per cent, in contrast to the previous 0 per cent rate.

In conclusion, several banks and financial institutions in Ireland are recognizing the need to provide their customers with more favorable deposit rates. By increasing their interest rates, these banks aim to attract more depositors and reward existing savers. While some rates fall short of those offered in other Eurozone countries, this upward trend in rates is a positive development for Irish savers. As we look towards the future, let's hope that this trend continues, providing more financial stability and improved returns for savers across the country.