Bank of Ireland reinstates 4% rate on SSIA top-ups

Bank of Ireland has reinstated its 4 per cent interest rate on top-ups to fixed-rate Special Savings Incentive Accounts (SSIAs) made by 28,000 customers before March 21st.

Customers who chose to increase the amount they were contributing to the fixed-rate SSIAs after the first year had been given acknowledgments from the bank giving the impression that the top-up amounts would attract the same fixed rate as their original investment.

However, Bank of Ireland's initial marketing literature had said that the fixed interest rate available on top-up investment amounts would not necessarily be 4 per cent but would instead be determined by the financial market conditions prevailing when the top-ups were made.

Interest rates on deposit accounts, including variable-rate SSIAs, have steadily fallen since the SSIA scheme closed in 2002.

The bank realised in March that it had failed to notify customers that lower interest rates would apply to top-ups.

A customer who increased their monthly contribution of €150 to €254, the maximum permitted under the Government scheme, should have received a rate of 4 per cent on the original €150 and the lower prevailing market rate on the additional €104. Instead, they received 4 per cent on the full amount.

Bank of Ireland wrote to customers at the end of April to say they would receive the 4 per cent rate on the top-ups only until March 21st. After that date the interest rate on the additional amounts invested would be reset to 1.7 per cent for the remainder of the five-year term.

A spokeswoman for the bank said the letters had caused a lot of confusion. The bank has decided that customers will receive the full 4 per cent rate on existing top-ups until the end of the term.

However, customers who have increased their contributions since March 21st will only receive the 1.7 per cent rate on the top-up.

Some 28,000 of the bank's 114,000 fixed-rate SSIA holders topped up before March 21st.

The spokeswoman said the bank was still encouraging people to top up, as it was the Government's bonus of €1 for every €4 saved that was the main attraction of SSIAs.