The large amount of savings in low-yielding Irish bank accounts has been described as a “missed opportunity”. With Central Bank data showing that up to €140 billion of Irish deposits still resides in overnight deposit accounts, accruing just 0.13 per cent in interest, Brokers Ireland highlighted “the very poor savings rate” savers in Ireland are getting on these accounts.
The group’s deputy chief executive Rachel McGovern said: “Leaving their savings, almost €140 billion, languishing in such low yielding accounts is a real missed opportunity.”
While there was evidence that some savers are beginning to move from these accounts, not enough were doing so, she said.
“Irish consumers historically have had a real attachment to these poor value accounts, which from a financial planning perspective, should only be used to hold emergency funds,” Ms McGovern said.
“These savings are being eaten into by inflation with savers losing the difference between the 0.13 per cent and the rate of inflation, currently running at around 0.7 per cent,” she said.
The latest Central Bank figures show household deposits increased by €4.7 billion, or 3.1 per cent, in the year to end-September.
As observed in past months, this movement was driven by deposits with an agreed maturity of up to 2 years, which recorded a positive annual growth in September, offsetting the ninth consecutive drop of annual overnight deposits flows, the bank said.
It noted these movements were contributing to a slowly decreasing share of overnight deposits, which represented 87.3 per cent of the total stock of household deposits at September-end.
Retail banks have been criticised for failing to increase their deposit rates in line with European Central Bank (ECB) levels while reporting big annual profits.
Banks insists, however, that Irish savers have been slow to move their money out of low-yielding overnight deposit accounts and into accounts with higher interest rates.
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