Not only can savers expect further cuts in returns, but charges may even be introduced on some types of deposit accounts following last week's surprise interest rate cuts across Europe.
The cuts, bringing almost all interest rates across the 11 euro countries to just 3 per cent, means savers' returns will be cut again, possibly before Christmas.
At the same time, banks and building societies are considering introducing charges on customers who run current accounts and some demand deposit accounts.
Pressure is likely to build on them to take these measures in the new year.
The financial institutions say it will not be possible to pay interest on current accounts. And even paying no interest will mean, representatives say privately, they will probably lose money.
They claim this is because interest rates are so low the return the banks and building societies get from lending the money into the wholesale money market for small deposits will not cover the cost of administering the account.
Banking sources say a deposit of £1,000 would attract interest of £30 in the inter-bank market at the moment. Just 15 transactions over a year would wipe that out and the margins are even smaller for accounts with less money.
"We will have to charge for account maintenance or there will be massive cross-subsidisation which no business can afford," one source said.
"Even at the moment we are giving depositors a better crack of the whip."
Sources say that while the possibility of introducing charges on accounts is being considered, the institutions are hoping moves towards more telephone banking and Internet banking may save enough money to be able to put this off, at least in the short term, by reducing the cost of administering deposits.
In the meantime, the interest rate cuts mean it will only be those customers with substantial deposits of at least £5,000 who are likely to get any real, or above inflation, return on their savings.
So far the lenders have not passed on the full benefit of interest rate cuts to borrowers, with only about 1.5 percentage points of the recent 2.5 point cuts passed on.
Irish Permanent is now offering variable mortgage rates at 5.5 per cent and the other banks and building societies will follow over the coming days.
But most observers say privately variable rates are likely to fall to 5 per cent or even below over the coming months as competition intensifies after the introduction of the single market.
The institutions were caught somewhat off guard last week. Most had expected some adjustment in Central Bank rates this week as part of its preparations for Ireland's entry into European Monetary Union, but on a smaller scale. The final rate cut this year was expected to be around 0.4 of a percentage point, to bring rates down to 3.3 per cent in line with other European states.
But the European Central Bank decided to reduce the base wholesale money market rate at which the euro would start to 3 per cent.
The Irish Central Bank therefore pushed down to these levels, forcing the institutions to make bigger than expected adjustments to retail interest rates.
It meant that the third round of reductions within a two-month period brought Irish interest rates to a new low, with the overall twopoint reduction cutting some £59 per month from a £50,000 variable mortgage over a 20-year period.