Permanent TSB (PTSB) has moved to increase various deposit rates, with its three-year fixed-term account increasing by one percentage point to an annual rate of 3 per cent, as Irish banks come under increasing pressure to pass on some of the recent Central Bank rate hikes to savers.
The smallest of the three remaining Irish banks said on Wednesday that other increases, effective from September 26th, include the rate on its regular savers products for accounts with up to €50,000 in them, which will increase by 1.5 percentage points to 2.5 per cent.
The move follows Bank of Ireland’s announcement of further increases to deposit rates earlier this week, with the highest also to be set at 3 per cent for customers with regular savings accounts where money is lodged on a monthly basis.
The European Central Bank (ECB) has increased the deposit facility rate paid to banks on surplus deposits lodged with the Central Bank from minus 0.5 to 3.75 per cent since July of last year.
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Minister for Finance Michael McGrath said last week he expected to see rate rises for depositors in the next few weeks, while the Oireachtas finance committee is preparing to grill the banks next month over their interest-rate policies.
Irish banks have lagged many European peers in raising mortgage rates since the ECB started hiking rates last summer, as they are more reliant on cheap household deposits to fund loans. Almost 95 per cent of Irish household deposits are sitting in on-demand accounts, which are earning little or nothing by way of interest.
AIB, Bank of Ireland and PTSB are earning 3.75 per cent on their surplus deposits, which stand at over €60 billion combined.
PTSB noted that its latest move marks its fifth set of interest rate increases for savers since last November.
[ Bank of Ireland announces interest rate rises for saversOpens in new window ]
“Deposit customers are extremely important for our business and we’re delighted to announce this latest set of increases to ensure our customers are rewarded with competitive deposit rate products in today’s higher interest rate environment,” said Patrick Farrell, retail banking director at PTSB.
“We’re also particularly pleased to offer customers the opportunity to earn up to 3 per cent from our market-leading three-year fixed term deposit product and 2.5 per cent from our regular saver products and, as always, we’ll continue to keep our rates under review to make sure our offering remains competitive.”
Minister for Further Education Simon Harris welcomed some banks having “finally decided to give some people a fair share of their own money”, but said the Irish lenders have been laggards in passing on deposit rate increases.
“Don’t expect me to say thank you on behalf of the people that I represent. They got away with it for a long time,” Mr Harris said.
The Minister was speaking as he congratulated students on receiving their CAO offers.
