Savers urged to shop around for best interest rates
CONSUMERS could earn hundreds of euro more on lump-sum savings by shopping around.
While interest rates on savings accounts have fallen dramatically in the past year, there are still big differences in the returns from various banks.
The amount of annual interest paid on a €10,000 lump sum ranges from €1 to €260, a survey by the Irish Independent has found. This is down from typical returns of up to €345 when this newspaper carried out a similar survey in late 2011.
We found that KBC offered the best deal for a deposit account that allows instant access to your money. Its Smart Access demand account pays 2.6pc interest, which on €10,000 adds up to €260 over a year. That rate will be coming down to 2.3pc next month but is still the best rate that's open to all customers.
By contrast, with a miserly interest rate of 0.25pc, putting your money in an Ireland State Savings Ordinary Deposit Account would yield you just €25 in interest over a year.
Demand deposit accounts with Bank of Ireland, ACC Banks and Permanent TSB pay even less interest – you'd net just €1 on €10,000 over a year.
Meanwhile, RaboDirect pays €225 in interest on its demand deposit account on €10,000. Permanent TSB would pay €250 on its Online Instant Access account but it's only available to people who already have an online account with them.
The Irish Independent also looked at deals if you want to save money every month, and again KBC came out best.
For someone saving €200 a month, the highest return over a year was KBC's Regular Saver Account, which pays 3.5pc up to €12,000. The interest in the first year would be €45.50, 75pc more than the €26 with Bank of Ireland Custom Saver and Save to Borrow accounts.
We used the National Consumer Agency's excellent financial comparison tool on www.nca.ie. It also allows you check the small print before you commit as often the headline interest rate only applies up to a certain limit.