Raisin Bank to offer Irish customers with deposits options to put money in accounts across Eurozone
A GERMAN bank is expected to shake up the savings market here by offering people with deposits options to put their money in bank accounts across Europe.
Raisin Bank is hoping to capture a slice of the €109bn in deposits by offering savers a better deal.
Its online platform offers access to savings accounts across the Eurozone.
Savers register with Raisin.ie and a list of the rates from various banks are displayed on the website.
It says it offers access to 25 savings products from around Europe with rates up to 1.2pc. However, rates at that level are only for those prepared to lock away their funds for at least five years.
Raisin says savings are covered for amounts up to €100,000 under the deposit guaranteed scheme.
The savings platform’s business development manager for the Irish market Alejandro McCormack said savers in this country were getting the lowest interest rates in Europe.
Mr McCormack claimed his company aims to “democratise deposits” by putting more money into savers’ pockets.
“Raisin Bank’s Irish platform aims to bring dynamism back into a huge sector of the economy: savings.”
It comes as it was recently revealed that most banks are paying so little interest to savers that most accounts are failing to beat inflation.
This means that savers are actually losing money in real terms by keeping funds in banks.
However, this excludes the three-year Savings Bond, sold by An Post here. It offers 1pc interest, with the return tax free.
Raisin will accept lump sums from €2,000 up to a maximum of €100,000 depending on the partner bank being used.
However, savers have to obtain a certificate of tax residency from Revenue to ensure that bank they choose through Raisin does not deduct savings tax at source.
They then have to file a return with Revenue to pay Dirt (deposit interest retention tax) from any interest they get. Dirt is currently 35pc.
Daragh Cassidy of price comparison site Bonkers.ie said the Raisin move is good news for Irish savers who have long had to contend with some of the lowest savings rates on offer in the Eurozone.
But he said that given the ultra-low interest rate environment even the higher rates being offered by Raisin will barely make a real return for savers once inflation and tax have been factored in.
He suggested savers should also look into the Government State savings schemes.
Returns are tax free with the State Savings 10 Year National Solidarity Bond, offering a market-leading 1.50pc AER (annual equivalent rate) over 10 years.
This would equate to a return of around 2.30pc AER if tax were applied, he said.