Bank deposits by Irish households rose to new record of €153.6bn last month

Three main Irish banks in earnings reports said they expect customers to shift more of their savings into higher-yielding accounts this year

Bank deposits by Irish households rose to a record €153.6bn last month. Picture: Bloomberg

Bank deposits by Irish households rose to a new record of €153.6bn last month, with a huge part of the savings still resting in low-paying accounts, economist Simon Barry has said. 

The European Central Bank figures also show that Ireland "is an outlier in the eurozone", despite recent flows into longer-term deposit accounts, Mr Barry said.

The three main Irish banks in their earnings reports in recent weeks have said they expect customers to shift more of their savings into higher-yielding accounts this year. International investors are keeping a close eye on the trend.  

The ECB figures confirm Irish customers were moving into higher-paying accounts, but that 90% of all household deposits were still in overnight accounts. 

Simon Barry said the ECB figures show Ireland is an 'outlier in the eurozone'.

"Over the course of the pandemic, Irish households seemingly took a somewhat passive approach in allowing their deposits to accumulate in high-convenience, but low-paying, overnight accounts," Mr Barry said in a commentary.

"The result was an ever-increasing rise in the share of overnight balances in a much-increased overall deposits total. 

At its peak in April last year, the overnight share of total household deposit balances reached an all-time record high of almost 94%.

At 90% in February, the share of low-paying household deposits is far greater than the average in the eurozone.  

"In aggregate across the entire eurozone, the overnight share in total household deposits is now less than 55%, down from its recent peak of 62%, highlighting just how different the Irish experience has been," Mr Barry said.