Madam, – Noel Smyth’s suggestion (Opinion, October 7th) that savers lend their bank deposits to the Government in the form of 3 per cent tax-free five-year bonds is well intentioned.
However, these deposits are not currently idle. They finance matching amounts of mortgages and other loans. A large outflow of deposits would require banks to either increase deposit rates or borrow from elsewhere. A loss of deposits would undermine our already fragile banking system.
Anyway, the Government already does as he suggests. The State Savings schemes run by the NTMA and An Post include Savings Bonds and Savings Certificates that offer over 3 per cent per annum over three to five-and-a- half years. – Yours, etc,