Savers increasingly moving money into term deposits 

In the year to the end of July, Irish consumers have moved €7.9bn into savings vehicles with an agreed maturity of up to two years. 

Irish consumers are moving their money into term-savings accounts in record volumes as the amount being kept in overnight deposits falls again, new data from the Central Bank of Ireland shows.

According to the data, in the year to the end of July, Irish consumers have moved €7.9bn into savings vehicles with an agreed maturity of up to two years — marking a record-high since the first positive annual flow was recorded in June last year.

This offset a 3.1% decline in savings placed in overnight deposits — which includes current accounts. This is the seventh straight month of decline in overnight deposits.

“This preference for term deposits is evident since the beginning of the year, and is related to higher interest rates on offer on these deposit types,” the Central Bank said.

Overall, household savings increased by 2.9% to €4.3bn in the year to the end of July. During last month alone, household deposits decreased by €256m and stood at €156bn in total.

This was mostly driven by a €1bn reduction in overnight deposits during the month, partially offset by a €824m million increase in term deposits in the month.

Net lending to households was positive in July at €416m which the Central Bank said was driven by positive movements in consumer lending and loans for house purchase worth €250m and €227m, respectively. Loans for other purposes, on the other hand, dropped by €60m in the month.

In annual terms, net lending to households remained positive, with flows of €2.4bn in the year to the end of July, representing an annual growth rate of 2.4%.

Lending to non-financial corporations — which refers to all private and public institutional units — turned positive in July 2024, increasing by €331 million during the month.