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Independent

Banks offer market-leading rates as battle for savers' cash heats up

 

By Charlie Weston Personal Finance Editor 

Thursday March 03 2011

 

THE battle waged by banks and building societies for savers' cash intensified yesterday after two institutions launched market-leading rates.

British building society Nationwide UK (Ireland) said it would offer a new 12-month savings account paying 3.65pc from today.

This would have been the best rate in the market, but later yesterday EBS topped it with a new 10-month term account paying 3.71pc.

The Nationwide UK account has a minimum balance of €3,000, while EBS's minimum deposit is €20,000.

Permanent TSB's Interest First account pays 3.62pc for amounts over €10,000. The interest is paid upfront and the money has to be deposited for a year.

Simon Moynihan of price comparison site Bonkers.ie said EBS had increased rates on a number of accounts, with its 18-month account now paying 5pc.

The battle for savers' cash has got more intense. "It looks like Nationwide has just had their thunder stolen," Mr Moynihan added.

Last week, the High Court approved of the transfer of 120,000 deposit accounts at Anglo Irish Bank to AIB.

And 160,000 accounts at Irish Nationwide moved to Permanent TSB.

Savers got a boost when AIB said it would continue to allow consumers to open new accounts with Anglo Irish and let them benefit from Anglo's high deposit rates.

Anglo's demand deposit account pays 3.1pc, compared with just 0.025pc paid by AIB.

Over a year, this means AIB's demand account pays just 25c, compared with €31 paid by Anglo for every €1,000 saved. This is before tax.

And AIB said it would continue to honour the terms and conditions of the accounts of the 120,000 people it is taking over from Anglo.

Anyone who wants to avail of the high rates paid on savings by Anglo Irish would have to open an account through Anglo, by going into its head office or by going online.

The competition for deposits remains strong despite the sell-off of the Anglo and Irish Nationwide deposit books, according to banking experts.

There are more than 400 different deposit accounts on offer in the market from 16 different banks, according to Frank Conway of website MoneyCoach.ie.

- Charlie Weston Personal Finance Editor

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