Savers are squeezed as banks cut deposit rates
BANK of Ireland, ICS, EBS and AIB are among the banks that have dropped deposit rates, a trend experts said was set to continue.
Savers are getting squeezed as more and more banks stop overpaying for deposits in an attempt to get the ratio of their loans and the funds on deposits back into line.
AIB has cut the interest it pays on a range of demand deposit rates by between 0.2pc and 0.25pc. Its subsidiary, EBS, has reduced rates on most of its term deposits, but is paying higher interest on six-month and nine-month deposits.
Bank of Ireland and its subsidiary, ICS, has made cuts of between 0.75pc and 0.25pc on a range of deposit account rates.
In a statement, the bank said: "Continued intense competition for deposits in the Irish market, elevated cost of wholesale funding and the high cost of the Government Guarantee (ELG scheme) have maintained ongoing pressure on the group's cost of funding.
For almost four years, savers have benefited from a price war that has seen banks try to outbid each other to offer the most attractive interest rates.
Banks have been desperately trying to entice consumers to deposit more cash since the collapse of Lehman Brothers in 2008.
Households here have €92bn on deposit at 13 different banks and building societies, according to the Central Bank.
The battle to attract deposits has led to a situation where eight deposit-takers are currently paying 3pc or more for demand deposits -- money that can be accessed without delay. Regular savers can get 4pc or more.