Bank of Ireland raises interest rates for savers 

Bank of Ireland has announced that it will be raising interest rates for savers for the second time this year, as well as introducing a new savings account with an initial interest rate of 1.5%. Picture Denis Minihane.

Bank of Ireland has announced that it will be raising interest rates for savers for the second time this year, as well as introducing a new savings account with an initial interest rate of 1.5%, in the wake of repeated hikes in interest rates by the ECB. 

The bank has moved to increase interest rates on its regular saver products (MortgageSaver, GoalSaver and Childsave) by 0.25%, bringing the overall rate on Regular Savings accounts to 1%. The new rate is effective from 19 May, and is capped at up to €15,000.

Bank of Ireland has also announced a new SuperSaver account available from June, which will offer a special interest rate of 1.5% for the first 12 months capped at €30,000, after which it will default to the standard Regular Saver rate of 1%.

In addition, customers opening a SuperSaver account will receive a discount of €100 on home or car insurance, and there will be no minimum monthly lodgement required.

The bank is also introducing two new one-year Advantage Fixed Term Deposit Accounts, one for personal and one for business customers, both available from 19 May.

Each will offer a 0.75% rate, which is an increase of 0.25% on current one-year fixed term deposit rates, and will have no maximum limit.

Susan Russell, Director of Retail Ireland, said she is “pleased to announce the enhancement to Bank of Ireland’s deposit offering which we see as an important component of our overall focus on customer financial wellbeing”.

The news comes as the European Central Bank (ECB) has increased the Euro refinance rate by a cumulative 3.75% since July 2022.

Bank of Ireland has already increased fixed rates for new mortgage customers by 1.5%, and by 1% for existing mortgage customers, as well as raising tracker mortgage rates in line with the ECB increases.

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”.

“Our mortgage rates are still among the lowest in the Eurozone. For now at least. This is because the main banks have been so slow at passing on the ECB rate increases to mortgage customers,” he said.

“However this ‘generosity’ has largely come at the expense of savers. Savings rates in Ireland are still miserable,” he added, noting that the best rate from Irish banks is just 1.5% with PTSB (now matched in the first year of BOI’s new savings account).

“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.