The battle of the savings accounts began in earnest yesterday as the nation's banks sought to attract the €7.5 billion worth of special savings incentive account (SSIA) funds which matured at midnight last night.

While many of the half a million people who are to get the money will already have long-thought-out plans for spending or saving their cash, a large proportion are still likely to be deciding on the best home for their funds, and the banks are determined to make the most of this.

Still, consumers are being urged to shop around before locking their money away in any sort of account.

PIBA, the Professional Insurance Brokers' Association, yesterday reiterated comments made by the financial regulator, warning consumers to read the small print and be fully aware of what they were signing up for when opening a new account.

According to PIBA, many of the special rates being offered by the banks do not match the rate of inflation, which is currently running at 5.1 per cent.

"That means that in real terms savers' money will be eroded in these products, and the lower the interest rate the more corrosive that erosion in real value will be," said Diarmuid Kelly, PIBA's chief executive.

While the release of such large amounts of cash into the economy is expected to boost confidence, IIB Bank and the ESRI said yesterday that many people were still feeling cautious when it came to their future finances and as a result would regard their SSIA payout as savings for a 'rainy day' rather than as an excuse to go on a big spending spree.

Postbank, An Post's banking joint venture, yesterday said that its new demand deposit account would offer a variable 3.3 per cent rate of interest. The bank is also launching a fund guaranteed to pay at least 2.5 per cent interest a year over five years.