Three new institutions have started taking deposits in Ireland, with attractive interest rates that are putting it up to AIB, Bank of Ireland and PTSB.
Spanish-owned Bankinter, formerly Avant Money, has launched a series of Irish savings products called Deposit Plus, offering a range of fixed-term deposit accounts.
It said its six-month fixed rate of 2.62pc annual equivalent rate (AER) was the best in the State. It is also offering 2.30pc AER for 12 months. Customers also have the flexibility to access up to 25pc of their funds after eight weeks.
Earlier this week, Monzo said it planned to enter the Irish savings market. Its instant-access account will offer an annualised rate of 1.6pc. The bank is currently operating a waiting list. People on the list can sign up and will be able to access the savings account when it is fully operational.
Competition in the savings and deposit market has quietly intensified over the past few months
Recently, Moco, which is owned by Austrian bank Bawag, entered the savings market in Ireland, offering rates of up to 2.6pc. Bunq customers can get a 1.86pc annualised rate for saving in a six-months fixed-term account. Berlin-based Raisin Bank is offering 3.10pc AER for three months with its Starter Account. The offer applies to new customers.
Daragh Cassidy, of price comparison site Bonkers.ie, said savers should look at what was on offer from the new entrants to seek out the best rate.
“Competition in the savings and deposit market has quietly intensified over the past few months, with new offers from the likes of Moco, Monzo and now Bankinter,” Mr Cassidy said.
“Irish households currently have just short of €170bn sitting on deposit with the main Irish banks, much of it still earning little or no interest.”
Daragh Cassidy of Bonkers.ie
This was why any new product or market entrant that encourages savers to do more with their money is welcome.
“Bankinter’s new one-year fixed rate of 2.30pc is competitive, and the flexibility for savers to access some of their money after eight weeks is a nice plus, as the fear of being ‘locked in’ remains one of the biggest barriers preventing savers from seeking better returns,” he added.
However, slightly higher rates are available through Raisin, especially if people are happy to put their money away for a slightly longer period.
“I’d encourage people to shop around and compare their options carefully before committing to a savings plan,” Mr Cassidy said.
The fact that inflation is still running at close to 3pc and deposit interest retention tax (Dirt) is 33pc means the returns from Bankinter would not be enough to generate a positive or “real” return for savers, he said.
Mr Cassidy called on the Government to look at ways to make saving and investing in Ireland more attractive. A tax-free savings scheme would be a good place to start, he said.