Irish households put less money into fixed-term deposit accounts in November with the vast majority of savers failing to lock higher rates.
Banks have embarked on a period of lowering deposit pricing as the European Central Bank (ECB) continues to reduce official rates.
Households moved €1.3 billion of savings into accounts with an agreed maturity, down 11 per cent from the previous month and 2 per cent from the period a year earlier, according to Central Bank data published on Wednesday.
The weighted average interest rate on term deposits declined by 0.04 of a percentage point on the month to 2.6 per cent – a level broadly in line with the euro-area average.
“The rate is expected to fall much further over the coming year as the European Central Bank continues to cut rates,” said Daragh Cassidy, head of communications with price comparison website Bonkers.ie. “I’d really encourage anyone with savings to avail of the higher rates that are still available. As they won’t be around for much longer.”
Almost 87 per cent of the total of €161.5 billion of Irish household savings are held, however, in on-demand or current accounts, where they were earning an average of just 0.14 per cent in November. At the same time inflation was running, according to the Central Statistics Office, at 1 per cent.
The ECB cut its key deposit rate by 1 percentage point to 3 per cent through four rate cuts between June and December.
Neobanks Revolut, which operates in Ireland through a Lithuanian banking licence, and German-based N26 followed up by reducing savings rates on offer to Irish customers in the last quarter of 2024.
Bank of Ireland moved last week to cut rates on certain deposit products, becoming the first domestic bank to do so since the ECB started to reduce official rates.
Banks in Ireland were among the slowest in Europe to raise deposit rates when the ECB was hiking, according to analysts. But even Irish bankers were surprised by the level of inertia that existed among households as they increased rates on certain savings products.
Meanwhile, the average interest rates on new Irish home loans at the end of November was 3.97 per cent, down 0.28 of a percentage point on the year, according to the latest Central Bank figures. The euro-area average declined by 0.71 of a point to 3.43 per cent.
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