The European Central Bank's decision to cut interest rates by a quarter point yesterday may result in some financial institutions reducing the interest rates they will pay for deposit funds under the Special Savings Incentive Scheme in coming weeks.
In the tables in Business This Week 2, the ECB rate is quoted at 4.75 per cent because the section went to press before the ECB rate change was announced. The ECB rate is now 4.5 per cent.
As at close of business yesterday, all the institutions quoted in our variable and fixed interest rate tables, with the exception of ACC Bank, confirmed that their rates still stood. No decision regarding rate reductions had been made at this stage by any institution other than ACC.
The institutions said the issue would be considered over coming days. For many it may be a case of waiting to see what competitors do.
ACC, which leads the variable rate table (table 1) with a 4.75 per cent rate, has cut its rate to the ECB rate of 4.5 per cent, which puts it on par with Irish Nationwide and First Active and behind Northern Rock in terms of interest rate offered.
