Bank of Ireland has announced a further increase to interest rates on a range of savings and deposit accounts, which are due to come into effect next month.
Those who hold SuperSaver accounts – a regular savings account with deposits made on a monthly basis – will see their interest rate rise to what the bank notes is a “market leading” 3 per cent, with increases also announced for a number of other saving products.
The announcement comes as banks are under increasing pressure to pass on some of the recent central bank rate increases to savers. The European Central Bank (ECB) has increased the deposit facility rate paid to banks on surplus deposits lodged with the Central Bank to 3.75 per cent since July of last year.
Minister for Finance Michael McGrath said last week that he expected to see rate rises for depositors in the next few weeks.
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“I do anticipate that we will see increases in the weeks ahead in the rates of interest being paid by banks on certain savings and deposit accounts,” he said.
The bank said the latest increases follow previous rate rises for its savings accounts this year. Mortgage rates have also risen.
Interest rates on Bank of Ireland SuperSaver accounts will rise from 2 per cent to 3 per cent for the first year. After the initial 12 months, a rate of 2 per cent (previously 1 per cent) will apply on balances up to €30,000.
MortgageSaver and Regular Saver accounts will see interest rates increased from 1 per cent to 2 per cent, up to a limit of €15,000 and €12,000 respectively. A rate of 0.50 per cent (previously 0.01 per cent) will apply on balances above these limits.
The bank announced that it would be increasing its 31-day notice interest rate from 0.5 per cent to 1 per cent, and that demand deposits which previously had a 0 per cent interest rate would now see a rate increase to 0.1 per cent.
Bank of Ireland has also announced a ‘10 per cent access’ feature for six-month, one-year and two-year term deposit accounts, allowing access of up to 10 per cent of the initial balance. A rate of 1.5 per cent will apply to the new six-month term deposit, while a rate of 2 per cent will apply to one- and two-year term deposits.
All increases come into effect from September 8th, and new rates will be automatically applied for existing customers.
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Susan Russell, chief executive of retail Ireland at Bank of Ireland, said customers should switch their money from their current account to a savings or deposit account to benefit from interest payments
“The market has gone from eight years of negative rates and, now that savers can benefit from better rates, we are encouraging customers to take action, start a savings habit or move money into interest-earning products or accounts. Customers can get a better return and enhance their financial wellbeing,” she said.
Ms Russell said the bank was “very conscious” of the challenges a rising rate environment brings for mortgage customers.
“We continue to take a very measured approach in relation to our mortgage rates,” she said, adding that Bank of Ireland “will continue to keep rates under review into the future”.
