Interest on savings doubled as AIB and EBS subsidiary increase rates to 2%

The bank is the first in Ireland to increase saving rates to 2% following continuous hikes by the ECB over the past 12 months
Interest on savings doubled as AIB and EBS subsidiary increase rates to 2%

Coming into immediate effect on Tuesday, June 13th, AIB Managing Director of Retail Banking Jim O'Keefe said the bank was "delighted to announce significant increases," on saver returns

AIB and its subsidiary, EBS have doubled returns for regular savers, increasing interest rates from 1% to 2% across a range of its deposit and saving offerings.

The bank is the first to announce the market-leading rate for savers following continued ECB hikes, with leading competitors, Bank of Ireland and Permanent TSB still offering maximum returns of 1.5%, implemented just last month.

The move follows months of criticism for not passing on interest rate hikes for savers following a year of interest rate hikes by the European Central Bank, with Euro area deposit rates rising by 375 basis points since July 2022.

Just last month, head of communications at bonkers.ie, Daragh Cassidy highlighted the low rates offered to Irish customers, adding, "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.

Similarly, John Lowe of financial advisory company Money Doctors branded interest rates offered by major banks as “disgraceful,” adding that savers would see a better return if they put their money into State prize bonds or regular stock market saver accounts.

Coming into immediate effect on Tuesday, June 13th, AIB Managing Director of Retail Banking Jim O'Keefe said the bank was "delighted to announce significant increases," on saver returns, adding that AIB will "continue to keep deposit rates and product offerings under review."

As cost-of-living pressures continue, savings shrunk by 14% in the first three months of 2023, yet, despite this, households still had €151bn in deposits with Irish banks at the end of March this year, compared to €110bn at the end of 2019 and €83bn at the end of 2007.

As part of its revised product offerings, rates for junior, student and family savers have all risen to 2%, with rates for children and teens increasing to 1.5%. In addition, the bank's 1 Year Fixed Term Offering has also risen to 1.5%, up from a previous 1%.

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