Interest rate war erupts as banks bid to boost funds
SEVEN deposit takers in the Irish market are offering interest of 3.5pc or more on one-year deposits, as banks scramble to get cash on to their books, a survey shows.
The one-year rates are at the highest they have been for decades, the survey by Bonkers.ie shows.
Irish savings rates almost double British rates.
The high interest rates are a sign of a brutal savings war being waged by the banks operating in this market, Simon Moynihan of Bonkers.ie said.
"The Irish banks are offering whopping rates on term accounts and really rubbish rates on the instant access types.
"And it's all very targeted. They're interested in people with big heaps of cash and they all want to lock it down for at least a year," he said.
Some of the interest rates are so high they might just tempt some of the money out of the likes of Rabo, which has hoovered up funds due to the fact it is foreign-owned and Triple A rated.
One of the highest one-year rates is on offer from AIB, with 3.7pc paid for amounts between €1 and €1m. But you lose most of the interest if you withdraw any of the money during the one-year term.
EBS is offering 3.7pc for amounts over €20,000. The rate is not available for those who already have money with the EBS.
Both KBC Bank and Nationwide (UK) Ireland are both paying 3.65pc on one-year money. KBC has a minimum amount of €20,000, while Nationwide has a minimum of €3,000 and a maximum of €2m.
You can make one withdrawal with KBC, but Nationwide has a 90-day interest penalty for early withdrawal.
Bank of Ireland pays 3.6pc on amounts between €10,000 and €50,000. You will not get all the interest if you withdraw the money early, according to Bonkers.ie.
Permanent TSB is offering 3.5pc for amounts greater than €10,000. With this account you get the interest first, before the end of the term.
Investec has a 3.5pc rate for amounts above €20,000 and less than €2m. You can make a one-off withdrawal of up to 20pc of the funds deposited.