Savers left with ‘poorer’ options as RaboDirect set to close

SAVERS have been dealt a new blow after savings bank RaboDirect confirmed it was closing down.

The online savings bank, which traditionally paid some of the highest savings rates in the country, said it would cease its operations here and close on May 16.

RaboDirect said this followed a decision by its Dutch parent Rabobank Group to simplify its business model across the world and reduce costs.

The deposit taker set up here in 2005, and has more than 90,000 customers with over €3bn on deposit.

It hoovered up deposits during the banking collapse here, as its parent was AAA rated by credit ratings agencies.

The announcement comes at a time when many banks are paying interest rates on savings that are at record low levels.

In a statement, the bank said it would waive the notice period on its saver accounts and would pay the interest earned up to the point of account closure.

“In the case of term deposit accounts, we are paying all the interest that would have been due on the deposits over the full term,” it said.

The Dutch financial services group said it plans to pare back its business.

“As conditions have changed across Europe generally, including Ireland, this source of funding is no longer required by Rabobank.”

Rabobank said that it remained committed to its corporate banking activities in Ireland.

But financial experts said that the closure was a blow, to savers here. Mark Whelan of price comparison site Bonkers. ie said the departure from the market would affect savers.

“Not too long ago, RaboDirect offered one of the best rates available in the Irish market, but the bank has been steadily cutting the returns available to customers for the last few years.”

He said the bank’s 90,000 customers would have difficulty finding a savings account that was even remotely attractive.

“The reward for putting €10,000 away for a full year with most banks now wouldn’t even yield a €20 return after Dirt.”

For those with a lump sum, the best returns in the current market are paid by KBC and Permanent TSB, both paying 0.5pc. For regular saving, KBC has the best rate at 2.5pc, but you need to open a current account to qualify for this rate.