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Irish Post
4 days ago
- Business
- Irish Post
Irish savers are getting some of the lowest returns in the EU
IRISH people are saving more than ever, with bank deposits reaching a high of over €160 billion at the start of the year. However, savers in Ireland are earning some of the lowest returns in the EU, with many people missing out on potential interest income due to persistently poor rates on both instant-access and fixed-term deposits. Recent analysis by Raisin Bank highlights just how uncompetitive Ireland's savings landscape is: the average return on overnight deposit accounts in Ireland over the past year was just 0.13 percent. German savers, by comparison, earned an average of 0.55 percent. On term deposits, which offer higher interest in exchange for locking away funds, Irish savers still fall behind other European countries, receiving an average return of 2.44 percent, compared to 3.06 percent in Italy. Over a ten-year period, the analysis shows the divide only grows starker. Irish people saw the lowest year-on-year returns of all countries surveyed in the report, averaging just 0.62 percent. The Central Bank estimates that Irish saving account holders missed out on €800 million in deposit interest in the last year alone. A large part of the problem lies in the structure of Ireland's banking sector. There are only a few banks to choose from and relatively little customer switching between institutions or account types. This means banks have little reason to offer competitive rates. Many people continue to keep their money in overnight accounts out of habit or a sense of security, despite better options being available elsewhere. According to Raisin, around nine out of every ten euro saved in Ireland is kept in these low-yield accounts. This cautious approach could stem from the global financial crisis. At the time bank competed for deposits, and savers were rewarded with attractive returns. However, since the crash, as the European Central Bank maintained a policy of ultra-low and even negative interest rates, the incentive to move money all but vanished. A rise in inflation since the global pandemic and geopolitical problems has also complicated matters. Even when interest is earned, it often fails to outpace inflation, resulting in a negative real return. The value of money sitting in a savings account may be quietly eroding over time. Ireland's 33 percent Deposit Interest Retention Tax (DIRT) worsens the picture, reducing the net return on interest earned. Unlike in Britain, Irish savers do not have access to tax-free options like ISAs, limiting their ability to build wealth in a tax-efficient way. The situation is especially difficult for younger people. High housing costs and rising living expenses mean that many can only save for short-term goals, like a deposit for a home, leaving little flexibility to seek out higher-yield, longer-term options. Meanwhile, older savers, who have less incentive to change, are leaving billions in low-return accounts. Banks have long relied on this to maintain their deposit base without offering competitive rates. Although fintech startups such as Revolut and N26 have entered the market with more appealing features and interest rates, concerns around fraud, customer service and digital access still intimidate some people. Traditional banks have also become targets for sophisticated scams, making some savers wary of exploring unfamiliar options. Credit unions also face deposit limits and regulatory hurdles that make it difficult for them to offer meaningful competition. Government savings products, like prize bonds, remain popular with a segment of savers, largely due to perceptions of safety. However, their real-world performance is mixed. In 2023, prize bond sales dropped significantly while redemptions rose, and critics argue that the lack of guaranteed returns and declining inflation-adjusted value make them an outdated choice. Despite strong savings among the Irish public, the system in which they operate does little to reward it. High deposit levels are masking deeper inefficiencies in the market, low competition, insufficient innovation, poor real returns and an over-reliance on traditional financial habits. In 'Low and Slow: Irish household deposit preferences and their response to the changing interest rate environment', Economist Tiernan Heffernan notes that although the European Central Bank's (ECB) reference interest rate hikes since July 2022 'did attract Irish households to place their deposits in longer-term deposit accounts to some extent, they still fall far behind the euro area average in this respect.' Irish households now hold the highest proportion of their deposits in overnight accounts of any euro area country. This cautious approach has come at a significant cost. While higher interest rates have slowly begun to influence saving behaviours, the shift has been modest. For much of the past decade, interest rates were so low that there was little difference between overnight and term deposit returns, offering households little incentive to lock away their savings. Although Irish term deposit rates historically trailed those in the euro area, 'this is not the case in the most recent data,' yet the habit persists. Part of the explanation may lie in Irish households' gradual response to change. 'Irish households have been slower than their euro area counterparts to respond to rising term deposit rates,' Heffernan writes. However, some savers have started turning to neobanks, attracted by 'higher rates on deposits and additional online services'. With inflation eating into savings and banks prioritising profitability over customer value, the current model benefits banks far more than ordinary people. See More: Banking, Central Bank Of Ireland, DIRT, ECB, Saving
Irish Independent
6 days ago
- Business
- Irish Independent
‘Ireland's returns are underwhelming' – savers are getting some of lowest value on deposit accounts in eurozone
Depositors remain at the bottom of the pack across the two major deposit categories – instant-access overnight accounts and fixed-term deposits, according to a survey compiled by savings platform Raisin. Overnight deposits – sometimes called 'easy access' – are the most common form of savings accounts in Ireland. Nine out of every €10 in savings is held in these accounts. Over the past year, Irish savers received an average return of just 0.13pc. The Raisin Bank analysis said this puts Ireland among the lowest in the eurozone for returns on demand deposits. German savers could avail of much better average rates of 0.55pc. Savers in this country fare slightly better on term deposit accounts, where money has to be locked away in a savings account for a period to get the full interest rate quoted. Raisin said: 'But even here, Ireland's returns are underwhelming.' The average Irish household received 2.44pc interest on new term deposits over the past year. This is compared with 3.06pc in Italy. Over the past 10 years, Irish savers had seen the lowest annualised returns of all countries surveyed, at 0.62pc, the Berlin-based bank said. Raisin said the loyalty of savers in this country to overnight accounts may be rooted in years of ultra-low or no returns, when moving money did not pay off. ADVERTISEMENT Learn more 'But the interest rate landscape has shifted. Term deposit rates have risen across the EU, and online banks are offering competitive deals that many in Ireland continue to overlook,' Raisin said. Holding on to bad savings habits is costing Irish households millions of euro a year in missed interest. The Central Bank recently revealed Irish households missed out on €800m in deposit interest last year alone. Eoghan O'Hara, country head for Ireland at Raisin, said low competition in the Irish retail banking sector may be a key factor in low rates. 'With only a handful of major players, and limited switching between banks or even account types, there's little incentive for institutions to offer competitive rates. In contrast, countries with more diverse banking landscapes, such as Germany, have passed on more value to savers.' It's the digital equivalent of stuffing it under the mattress He warned that Irish savers were being left behind, not only in relative terms, but also in real returns. 'In a high-inflation environment, earning little to no interest in an overnight savings [account] equates to a negative real return and a loss of spending power.' He said that when Dirt (deposit interest retention tax) is accounted for on the earnings, the net result is even worse. 'Keeping money in a low-paying, overnight account is essentially the digital equivalent of stuffing it under the mattress. It may feel safe, but your spending power is eroding,' Mr O'Hara added. There is about €160bn in household savings in Irish banks. Mr O'Hara said savers should ensure their money was working harder for them. They should explore the options and if possible lock away their money in a fixed-term deposit where they can get a much better rate. He also advised people to shift their savings to a bank that offers higher rates, and to look for serious offers in other EU countries.
Irish Independent
10-06-2025
- Business
- Irish Independent
Many of those getting married forced to borrow to fund the ceremony
And the average budget for an Irish wedding is now between €10,000 and €20,000, according to research carried out by online savings platform Raisin Bank. More than half of married couples who were surveyed said they splurged at least €10,000 on the nuptials.
Irish Independent
10-06-2025
- Business
- Irish Independent
One in four couples spending up to €50,000 to pay for wedding, with almost a half willing to go into debt for celebration
And the average budget for an Irish wedding is now between €10,000 and €20,000, according to research carried out by online savings platform Raisin Bank. For those who tied the knot in the past five years, the average wedding spend was around €10,000. Costs are rising for those who have yet to tie the knot. And budgets for the big day vary hugely, according to the Raisin Bank Wedding Report 2025. The research found that 45pc of those surveyed said they were willing to go into debt to fund the marriage ceremony and celebrations on the day. Weddings are big business, with many couples opting for big events in stately homes with others decamping with friends to sun-soaked beaches abroad to mark the occasion. The survey found that nearly half of respondents feel social stress at weddings. Just 8pc of couples kept the cost of their celebrations under €1,000. A quarter spent between €20,000 and €49,999. The largest group, 30pc, landed in the €10,000 to €19,999 range. On a per-guest basis, that translates to an average spend of €100 to €200. Another 28pc of respondents kept things modest, spending no more than €5,000. ADVERTISEMENT Learn more It is not clear how much spending has changed in recent years as this is the first time Raisin commissioned a report on wedding costs. Eight-hundred adults who are married or are planning to get married were surveyed by market research firm Pollfish for the report. Raisin said weddings can be expensive and are right up there with buying a home or putting a child through college as one of life's major financial milestones. Researchers for the bank found that more than 90pc of married Irish people say they put money aside for their big day. Among those under 30, that figure climbs to 98pc. Of those who saved, 57pc saved for a year or more, while the remaining 43pc managed to pull it together in under 12 months. One in four took more than two years to save for their celebration and 46pc of married people in Ireland ended up taking on debt to cover the costs. Debt isn't always a bad thing – as long as it's manageable Among couples under 30, that figure shoots up to 67pc. For those aged 50 to 64, this drops to about one in five. Just over half of respondents took out a personal loan. Nearly one-third of respondents borrowed from family or friends. One in five opted for their overdraft facility. People getting hitched prefer cash over other types of gifts, with 85pc of respondents agreeing that cash in an envelope is the way to go. The largest chunk of respondents prefer a sum of between €100 and €200. Almost one in five respondents – and one in four of the under-30s – put in €300 or more. Raisin Ireland country head Eoghan O'Hara warned those getting married to be careful about taking on debt. 'Debt isn't always a bad thing – as long as it's manageable,' he said. 'The key is to set a realistic budget, understand what your monthly repayments might look like, and make sure the cost of the big day doesn't hang over your married life like a cloud.'
The Journal
18-05-2025
- Business
- The Journal
Irish bank customers losing out on windfall by keeping money in demand deposit accounts
CUSTOMERS WHO KEEP their savings in demand deposit accounts with Irish banks could be missing out on a significant windfall in interest payments. According to figures from the Central Statistics Office, Irish customers are currently keeping a cumulative total of €140 billion in demand deposit accounts with interest rates well below those available through Raisin, a free-to-use online savings platform . Interest rates offered by Irish demand deposit accounts aren't keeping pace with inflation. An analysis by savings platform Raisin found that accounts of this nature have yielded a relatively paltry 0.13% AER (annual equivalent rate) in interest on average this year. Irish bank customers lost a total of nearly €2.7 billion in purchasing power last year due to the same measly returns on their savings, and it's likely that you are currently leaving money on the table if you're keeping your savings in an Irish demand deposit account. Raisin is a platform that allows users to access the interest rates offered by over 25 trusted banks across Europe with just one log-in, meaning that you can make significantly more back on the lump sum that you've put away for a rainy day compared to Irish demand deposit accounts. Through Raisin, Irish customers can instead hold their savings in term deposit accounts offered by European banks, including those rated AAA by Standard & Poor's, including banks based in Germany, Luxembourg and Sweden. Term deposit accounts have delivered much higher returns so far this year, at roughly 2.43% AER on average. On the Raisin homepage, you can see exactly the kind of interest your savings could yield if you were to hold them in a European bank for a fixed term, such as five years. Advertisement Interest rates available to Raisin users Raisin Bank Raisin Bank For example, if you were to deposit €30,000 with German bank Aareal through Raisin Bank in a fixed-term five-year deposit account, at the end of the term you would have accumulated €4,125 in interest based on current interest rates. If you are looking at building up interest in a more short-term fashion, there are also banks which offer interest rates of roughly 2.5% on six-month term deposit accounts. Money held in these bank accounts is protected by the EU-wide Deposit Guarantee Scheme, which ensures that funds up to €100,000 per bank, per saver, are safeguarded. Raisin also offers access to demand deposit accounts, if you would prefer to shop around for a savings account that doesn't hold your money for a fixed term. You can explore the wide array of banks, deposit accounts and interest rates that are currently available to Raisin users here . Signing up for Raisin Bank is simple, requiring only one log-in and no fees whatsoever. Explore the options available to you and make the switch from a low-yield demand deposit account to a higher rate term deposit from over 20 trusted European banks. Eoghan O'Hara, Irish financial expert at Raisin Bank, warned that 'even with better offers out there, many are still accepting measly rates on their hard-earned savings. If you don't need access to your money for a while, consider locking it into a term deposit to get real value.' If you feel like your savings aren't doing as much for you as they should, visit Raisin and find out how you can get more out of your money. All interest rates are valid as of 18 May, 2025. Raisin Bank holds a full banking license under the German Banking Act (Kreditwesengesetz) under registration number 100112 and is supervised by the German Federal Supervisory Authority.
