State-owned AIB is offering German savers an interest rate that is more than three times that offered to Irish customers.
The Irish bank has joined 11 other European banks targeting the pan-European deposit market, leading to its new offer to German savers.
AIB, which is 99 per cent owned by the State, is offering 12-month fixed-term deposits through the German online start-up SavingsGlobal, at a rate of 1.4 per cent.
Its best comparable rate on the Irish market is just 0.45 per cent, while AIB subsidiary EBS pays a rate of just 0.7 per cent on 12-month deposits.
This means that over two years someone depositing €50,000 through the German website would earn €1,418 in interest, compared with just €452 if they saved with AIB in Ireland.
To avail of the higher 1.4 per cent rate, savers must be "resident in the Federal Republic of Germany and not a resident of Ireland", the website says.
German savers can deposit between € 10,000 and € 100,000 through the site, with no withdrawals allowed over the fixed term.
German savers with AIB are protected under Ireland’s deposit insurance scheme, which protects up to €100,000 per person per institution.
AIB joined SavingsGlobal last May and says that while the initiative “represents a fraction of a percentage of our overall deposit base” it helps the bank diversify its funding base.
“It gives us the potential to create a diversified and sustainable retail deposit funding base if required in the future that would make us more resilient to economic shocks and reduce our dependence on other sources of funding,” a spokeswoman for the bank said.
SavingsGlobal, which was founded by alumni from McKinsey, Deutsche Banke and Goldman Sachs, acts like a broker to European banks, removing the difficulties in cross-border deposits such as language obstacles, by funnelling deposits on behalf of consumers to partner banks.
It also opens up new opportunities for savers. AIB is one of 12 European banks which have signed up to the platform so far.
Others include the Bulgarian American Credit Bank, Portuguese bank Novo Banco and German bank Grenke.
According to a spokeswoman for
, the start-up is set to launch an English-speaking platform in the coming weeks across
, known as
The new platform will allow savers across Europe, including Ireland, to access deposit rates of as much as 1.6 per cent on a one-year term deposit, or 2 per cent a year for those willing to lock their money away for three years.
The best equivalent rate on a one-year deposit in Ireland at present is 1.15 per cent with Nationwide UK, or 1.2 per cent a year over two years with KBC Bank, according to the Competition and Consumer Protection Commission.