By Geoff Percival
BANK OF IRELAND, which launched its new product options for SSIA funds yesterday, has announced that it will continue the government bonus of 25% for six months on continued regular savings into its Bank of Ireland Special Bonus Investment Plan equity investment option.
BoI holds a 23% share of the overall SSIA market through 71,000 equity customers and 201,000 deposit SSIA accounts. The estimated maturity value of its customers' SSIAs is €3.5 billion. The bank has also launched a new deposit account The Special Bonus Saver Account which will pay 3.75% on new regular savings.
Research carried out by Bank of Ireland has shown that 80% of SSIA customers intend to continue saving when the scheme matures this year and next, with 60% planning to save for up to two years.
Following the maturity of SSIAs, the average likely level of savings per person will be around €175 per month, potentially generating €2 billion in savings annually.
Commenting on the launch of the new products, Ronan Headon, head of savings at Bank of Ireland said: "These products offer unrivalled choice and we believe that there is going to be serious interest from customers and non-customers alike, particularly in our Special Bonus Investment Plan that will apply the 25% bonus for a further six months. Our research has shown that many customers who switched from equity to cash early in the scheme regret this decision and the strong performance of equities markets to date has created a real appetite for this type of investment option.
"Interestingly, the strong performance to date of equity SSIAs has created a greater appetite for stock market investment options.
"Of those interested in long-term savings, nearly half expressed an interest in equity-based investments, primarily because these products are likely to have outperformed cash products over the life of the scheme by between 9% and 15%. The continuation of the 25% bonus will capture the imagination of customers," Mr Headon added.
Existing customers must re-invest half of their accumulated savings to qualify, the bank added. New customers must begin with three times their annual savings contribution.