Permanent TSB to raise interest rates for savers

The bank is the second to increase deposit rates this week in light of rising pressures to pass through interest rates for savers

Despite recent increases in deposit rates, banks have been slow to fully pass on the increase in deposit rates, with low rates for savers largely offsetting the impact of monetary policy on mortgage borrowers. Photo: Sasko Lazarov/RollingNews.ie

Permanent TSB has announced a 0.25% rise in interest rates paid to savers across the bank's range of deposit accounts, marking the bank's third increase in saving and deposit products since November last year.

The move comes in the wake of continued rate hikes by the European Central Bank, with rising pressure being placed on banks to raise deposit rates for savers.

The rise in PTSB's saving rate follows an announcement from Bank of Ireland on Wednesday in which they pledged to increase interest rates for savers for the second time this year, as well as introduce a new savings account with an initial interest rate of 1.5%.

Despite recent increases in deposit rates, banks have been slow to fully pass on the increase in deposit rates, with low rates for savers largely offsetting the impact of monetary policy on mortgage borrowers.

Taking effect on the 20th of June, the rate paid on the banks demand deposit accounts and notice deposit accounts will rise by 0.25%, totalling 1%, with the rate paid on children's deposit accounts increasing by 0.99%, also totalling 1%.

For fixed term deposit accounts, interest rates will also increase by 0.25%.

Additionally, PTSB Customers have been advised by PTSB to contact the bank for information on how the changes will impact their individual circumstances and should seek independent financial advice.

Earlier this month, Head of Communications at mortgage broker bonkers.ie Daragh Cassidy highlighted that main banks have been slow to pass on the ECB rate increases to mortgage customers, “at the expense of savers”.

“However this ‘generosity’ has largely come at the expense of savers," said Mr Cassidy. 

"Savings rates in Ireland are still miserable. Deposit rates over 3% are now widely available in Europe. In essence, savers are now heavily subsidising mortgage holders. Whether that’s right will differ vastly depending on whether you talk to a mortgage holder or someone with big savings,” he said.