A recent study by the Central Bank revealed that Irish consumers’ preference for shorter-term, more accessible deposit account types, relative to average euro area household behaviour, cost them almost €800 million in unearned interest in 2024 alone. This is in spite of a series of ECB interest rates rises since 2022, which meant that deposit term accounts were more attractive than in the previous few years.
“This was an eye-catching statistic for us,” said Eoghan O’Hara, Country Head, Ireland, at Raisin Bank. “The Irish household preference for short-term or overnight savings accounts or even current accounts is costing them millions in lost interest. When you break that down loss per capita, the numbers are quite stark.
“Another statistic that was quite eye-catching – for us anyway, as we’re a European-wide platform – Irish households have 90 per cent of all their savings or deposits in these easy-access accounts, which compares to an average of 55 per cent in the eurozone. So, we’re a little bit behind the times as a savings nation.”
When asked about the reasons for this, O’Hara believes a number of factors come into play. “I think for some, there’s a sense of foreboding that something might happen, and they would need to have access to cash – maybe that’s within our nature. But people should really take the time to look at the options available to them. Savers should consider diversifying their savings and put an amount they’re comfortable with in a term deposit to get the benefit of a fixed interest rate while also having enough savings to hand if something unexpected pops up”.
With only three pillar banks left in Ireland, there’s also a little of “fear of the unknown” with looking beyond Ireland for better deals – but O’Hara says that European Deposit Guarantee scheme should ease those fears. “The scheme is harmonised; it’s not just an Irish protection policy; it’s in every European Union country. Savings are protected up to €100,000 per bank. Once you’re a European Union or European Economic Area resident, you are covered by the guarantee when banking with a European Union Bank. And that’s regardless of whether you’re living in the country where the bank is domiciled.
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