Interest rates and deposit levels slip back

Interest rates on loans and deposits held by households saw modest falls in August, according to the latest release from the Central Bank.

The financial crisis wreaked havoc across the banking system. Irish banks are still paying elevated levels for deposits compared with other eurozone countries. However, the cost of funding in some cases exceeds the interest on some financial products, particularly tra-cker mortgages.

According to the Central Bank, the average interest rate on deposits with an agreed maturity of two years was down by six basis points at 3.54% at the end of August. Interest rates on total outstanding household deposits fell from 3.47% in July to 3.41% in August.