SSIA savers expecting to share in a multi-billion euro windfall over the coming months were today warned against putting their cash into current accounts.
The Financial Regulator insisted it would be senseless to leave money in accounts where the banks are paying little or no interest.
Banks and building societies are clambering over each other with headline-grabbing offers to woo new customers as the government savings scheme reaches maturity. And savers in the Special Saving Incentive Account scheme are being advised to be wary of attempts to attract their cash and to look closely at the small-print in the savings options being promoted.
"Billions of euros in SSIA funds are now coming to maturity and banks and credit unions are competing for your business by promoting deposit accounts with higher interest rates," said the Financial Regulator's Consumer Director, Mary O'Dea.
"All this is good news for consumers and we would encourage people to look at the wide range of products available. "The interest you can earn is important but you need to take the terms and conditions into consideration too, as, in some cases, any breach of
the terms and conditions could substantially reduce the interest you could earn," she said. The Financial Regulator said interest rates might look great but on closer inspection may only apply to part of the savings.
Also, interest rates may change if customers make more than a certain amount of withdrawals on the account, it was warned. "Ask your financial institution about how the interest is calculated, how frequently you can withdraw your money, what fees and charges or other conditions apply and will your lump sum remain intact, said Ms O'Dea.
"Explain what you want from the account and ask is it the most suitable product for you." She also urged caution over putting cash into deposit or current accounts that get little or no interest from the banks and building societies. "Some savers may choose to have their SSIA lump sum paid into their current account," said Ms O'Dea.
"While this may be convenient, the Financial Regulator's most recent cost survey on current accounts showed that most current accounts pay little or no interest on balances so it does not make sense to leave large amounts of money in a current account."
Latest figures from the Central Bank show Irish consumers have over €70 billion in deposit accounts, much of it getting little or no interest.