SSIA savers warned to shop around for better interest rate deals

SAVERS were last night warned to make sure they get the best rate of interest they can if they want to keep saving their SSIA windfalls.

As the last of the country’s 1.1 million SSIA accounts matured yesterday, banks are converting the accounts into normal savings schemes.

But the Financial Regulator yesterday warned the interest rates on offer might not be as lucrative as the rates applying to SSIA accounts, so savers need to check.

A survey released yesterday by the regulator showed interest rates on standard deposit accounts as low as 0.1% a year before tax.

Even for savers with the average SSIA balance of €19,000, interest rates on offer can be as pitiful as 0.25%, again before tax.

The regulator’s consumer affairs director Mary O’Dea is urging savers to check the interest rate on their accounts and switch to a better deal if they need to.

“Several institutions will transfer matured funds into an instant access deposit account, but the rate on this account may not be as high as that available elsewhere,” said Ms O’Dea.

“People who have not yet decided what they plan to do with their money should look for an account with the best possible rate that will give them access to their money when they need it.”

She said that the nation’s savers had €70 billion on deposit with the banks, yet half of this money was earning interest of a mere 1% or less.

The Financial Regulator has looked at different savings accounts provided by 17 banks, finding rates varying from 0.1% with An Post to 5% with RaboDirect.

Researchers looked at accounts offered for savers with typical lump sums of €5,000, €10,000 or €20,000 to invest.

None of the accounts beat the inflation rate of 5.1%, meaning savers will see the value of their money dwindle until inflation comes down.

Yesterday, the Consumers’ Association of Ireland (CAI) urged savers to find the best rates of interest for their SSIA money instead of leaving their cash in what could turn out to be low-interest accounts.

CAI chief executive Dermott Jewell said the problem of consumer inertia meant banks were getting away with offering accounts with interest rates below inflation.

But he said consumers were bombarded with a tide of information that left them confused over savings accounts as well as other basic financial products.

“Unfortunately many consumers opt for the devil they know and as long as they do the banks will continue to rack up profits at an enormous rate,” he said.

He said banks were charging higher rates of interest to borrowers like homeowners but failing to pass on recent hikes in lending rates to savers.

Copies of the survey are available from the www.itsyourmoney.ie website or by phoning 1890-777777.