Bank of Ireland cuts deposit rates for savers

First change since July 2017 will irk savers, with some rates cut by as much as 80%

The changes will affect most, if not all, savers with the bank. Photograph: Dara Mac Dónaill

The changes will affect most, if not all, savers with the bank. Photograph: Dara Mac Dónaill

 

Bank of Ireland has cut the return it offers savers on a swathe of products, slashing some by up to 80 per cent, and making earning a return on deposits even more difficult for beleaguered savers.

It’s the first change in rates since July 2017, and the bank says the downward move in rates is “reflective of the current low interest rate environment”. But savers will undoubtedly be irked, given there has been no change in European rates, which remain at zero.

The changes came into effect on February 22nd and will affect most, if not all, savers with the bank.

The rate on the bank’s 12-month Advantage product, for example, has fallen to just 0.1 per cent on deposits up to €1 million, down from 0.2 per cent previously. The bank has also tightened up access to its Advantage range; previously it offered a lower rate of return for savers who wished to access a portion of their savings, but this has now ended.

The bank will also pay savers in its Growth range – which offer terms of three to seven years on savings of up to €10,000,000 – less than they previously earned. The seven-year product, for example, will now offer a fixed return of just 2.44 per cent over the term, or an AER of 0.35 per cent a year. This is less than half the 5.58 per cent rate depositors previously enjoyed over this term. Similarly, savers of the three-year product will also see their return fall from 1.19 per cent to just 0.44 per cent over the term.

Online rates

The bank has also changed its online-only rates, with the return on its 12-month fixed-term deposit cut from 0.25 per cent to 0.10 per cent. This would mean a saver with €10,000 on deposit at this rate would see their return fall from €25 to €10.

The bank will also pay its online regular savers less, with a yield of 1.2 per cent on monthly savings of €0-€9,999 dropping back to 1 per cent.

It will also pay less on the balance in these regular savings accounts, just 0.05 per cent, down from 0.25 per cent previously.

Savers looking for a better return should consider their options elsewhere but they shouldn’t expect to earn too much more.

The best return on an instant access account, for example, according to the Competition and Consumer Protection Commission, is just 0.15 per cent, available with either KBC or State savings. Over a 12-month fixed term, the best rate is 0.5 per cent with Permanent TSB, although KBC also offers a rate of 0.65 per cent to its current account customers.