People who opened Special Savings Incentive Accounts (SSIAs) linked to the equity markets are on track to receive a higher sum than those who opted for deposit accounts.
New figures from Bank of Ireland show that savers who contributed the maximum sum of €254 to an equity SSIA since May 2001 have a 9 per cent higher fund than those who took out a variable-rate deposit SSIA.
People who chose the riskier option of Bank of Ireland's equity Growth Fund are also 5 per cent better off than those who opted for a fixed-rate SSIA at an interest rate of 4 per cent.
The Growth Fund maximum contribution savers had a balance of €18,534 as of July 1st, compared to a balance of €17,645 in the fixed-rate accounts and €16,990 in the variable-rate accounts. These accounts will mature next May.
The balances include the Government bonus of €1 for every €4 saved and are net of charges, but do not show the effect of exit tax.
SSIA holders who opened their accounts closer to the scheme's deadline in April 2002 will have been rewarded to an even greater extent if they chose an equity-linked account over deposit ones.
The Growth Fund is outperforming fixed-rate accounts by 8 per cent and variable-rate accounts by 12 per cent.
Equity SSIAs opened later in the scheme are performing better than those opened earlier as they would have avoided equity market weakness in 2001 and 2002.
The figures confirm a sharp turnaround in the fortunes of equity-based SSIAs versus cash deposits. At the end of June 2002, fixed-rate cash SSIAs that had been open for at least a year were worth 8 per cent more than equity-based equivalents.
"Today's figures back up our message that equities offer greater potential for good returns than cash over time," said Gareth McQuillan, Bank of Ireland Life's head of marketing.
However, figures released by Eagle Star last week indicate that SSIA savers who opted for its equity 5 Star 5 fund are on course to receive an even greater windfall on maturity.
Savers who contributed the maximum to this fund since May 2001 have a balance of €19,782, net of charges, compared to €18,534 at Bank of Ireland.
