Move your savings to really pique interest of Irish banks
Digital banks are offering up to 3% on easyaccess accounts that should shake up their sleepy Irish counterparts.
Raisin.ie recently launched a 3% deal ‘on demand’ – or 2% after Deposit Interest Retention Tax (DIRT).
Meanwhile Revolut has just come up with a new account offering 3.5% gross and 1.86% net.*
The closest challenger to both is Bunq, which has an on-demand account paying 2.46% gross (1.65% net of DIRT).
Some people, particularly many pensioners, may not be liable for DIRT but most people are.
So what other easy-access accounts are out there? An Post pays 0.75% tax free.
But after that the main Irish banks are paying just a quarter of that on demand despite 10 hikes in interest rates in less than two years.
When I stated at the start of this article that the new bank rates ‘should’ shake up sleepy Irish banks, I didn’t say they actually would!
Irish banks are still locked in a very low interest rate cycle for deposits.
And savers don’t seem that interested in making them change their ways by moving their money to the digital competition.
We have over €150bn on deposit in Ireland – almost all of it in accounts paying an abysmally low rate of interest.
And if depositors can’t be bothered switching accounts, why should banks increase their rates?
It’s up to us to shift our dosh elsewhere and put banks under pressure to up their game.
*Revolut’s ‘savings’ account is actually placed in a cash ‘investment’ account, which is liable for a higher rate of tax (41%) and a service charge of 0.5%.