Sunday 25 August 2019

Savers get just €3 interest for every €10,000 they have in bank deposits

Return rates on savings here lowest in eurozone

Household deposits grew by more than €1bn in March
Household deposits grew by more than €1bn in March
Charlie Weston

Charlie Weston

Savers in this country are getting the lowest return on deposits in the eurozone.

They are getting just €3 a year for every €10,000 saved in a bank or credit union.

This is despite record amounts of money being put into savings accounts in banks and credit unions by householders.

Banks here charge some of the highest interest rates for mortgages in the eurozone.

New figures show that the average interest rate paid on new deposits in this country is just 0.03pc.

This means that there is a return of just €3 from €10,000 deposited for a year.

The average retail deposit rate in this country is just one 10th of the average across the eurozone of 0.32pc, according to Raisin, a provider of deposit accounts across the zone. However, it is not authorised to operate in this country.

Interest rates paid on deposits are also low in Spain, Belgium and Portugal, but not as low as in this country.

The survey states: "Ireland persists with the lowest rates in euro territory."

It added that savers in other eurozone countries continue to benefit from much higher rates. Savers in the Netherlands are paid an average interest rate of 1.22pc on their deposits. In France, there is a return of 1.1pc.

This means that Dutch savers get a return of €122 on €10,000 saved for a year.

Raisin found that interest rates on savings are falling in this country, despite the Europe Central Bank (ECB) leaving its base rates unchanged for years now.

And there is no prospect of the ECB raising its rates any time this year. It could be well into next year before that happens.

The market had long anticipated a rise in interest rates in the second half of this year from the all-time-low levels rates were slashed to during the financial crisis.

But with real growth in the euro area flat-lining and with even Germany threatened by recession, the ECB had already backtracked on those plans.

The survey found that deposit rates have fallen by 57pc in the last year.

This trend is right across deposit rates, with rates down by 19pc in the Netherlands and by 12pc in France.

And longer-term rates are low in this country compared with the rest of the eurozone.

One-year rates average 0.38pc, which is the lowest in the zone.

This would earn €38 after a year if €10,000 was deposited.

The survey results come as Central Bank figures show that household deposits grew by over €1bn in March, continuing the trend of consistent growth in overnight deposits.

This represented the highest level of monthly growth in over 18 months and is well above the average over the period of €321m.

Outstanding household deposits have now reached €105.8bn.

This is the highest level since the series began in 2003, according to a note to investors by Davy Stockbrokers.

Irish Independent

Also in Business