Most of the state savings products offered by the NTMA (National Treasury Management Agency) have had their interest rates reduced this week.
The lower rates only apply to new purchases made from June 3rd . If you already hold Savings Bonds, Savings Certificates, Instalment Savings or National Solidarity Bonds – your interest rate will not change.
The interest rate on the 3 Year Savings bond has dropped from 7% to 4% .
The rate on the 4-year national solidarity bond has fallen to 8% from 12%.
The rate on the 5 year savings certificate has dropped to 11% from 15%.
The 10 year national solidarity bonds now pays 35% instead of 45% .
It was reported that Bank of Ireland and AIB were putting pressure on the Government to cut the NTMA interest rates because they were finding it hard to compete with them.
Bank of Ireland shareholders will be happy to see the NTMA rates plunging – it will mean more deposits for them and more profits. Meanwhile the ordinary savers in Ireland see their interest rates slashed while they are still suffering austerity because of the billions spent on bailing out the same banks !
There were slso reductions to the interest rates on variable rate products which will have an immediate effect on all existing holders of Prize Bonds and the 30 day notice Deposit Account Plus.
Prize Bonds – with effect from Sunday 2 June 2013 the variable rate of interest used to determine the value of the monthly prize fund is 1.75%. )It was 2.25% prior to this and was 3% in December 2012)
The top prize structure is also changing. Previously there was a €1 million prize each month, but now, with immediate effect, there will be a €1 million prize in the last weekly draw of each second month.
The 30 day notice Deposit Account Plus now pays just 0.50% AER
There is no change to the Ordinary Deposit Account which pays a rate of 0.25% AER subject to DIRT.
See our page of the Best Deposit Rates in Ireland