CHARLIE WESTON – 01 AUGUST 2013
THE amount of money being saved by households fell by €100m in June, with lower interest rates being paid by banks taking the blame.
There is now €91.5bn in households deposits in banks, according to new figures from the Central Bank.
The figures emerged as a survey found that three quarters of savers are unhappy with the returns they are getting on their deposits in banks.
Standard Life surveyed more than 1,000 people and found that most of them think they are not getting a good return. When it comes to those over the age of 45, almost all feel they are not getting good value.
Head of marketing at Standard Life Brendan Barr said the cuts in deposit rates, that has been going on for more than a year now, was driving people to seek out investments.
"We are already see a consumer move from deposits to higher-yielding investments through our own business flows," he said.
The biggest fall in the level of deposits has been in long-term accounts, with maturities over two years.
Economist with Goodbody Stockbrokers Dermot O'Leary said savers were being turned off because banks were cutting deposit rates. "This is an opposite trend to a year ago and is reflective of significantly reduced deposit interest rates in the Irish banks over the past 12 months.
"Separate data, released last week by the Department of Finance, confirmed that deposits are now effectively flat on an annual basis."
Last week Investec cut its rates for the second time in two months. The deposit taker cut three of its savings products – the 12-month term account, a six-month term account and a three-month one, according to price comparison site Bonkers.ie.
The Central Bank figures also show that the dependence of banks here on on ECB funding continued to fall during June. ECB drawings now stand at €46.1bn, with covered banks accounting for €34.8bn of this.
The amount for covered banks is down from a peak of €93bn in January 2011 and reflective of both the return of Bank of Ireland and AIB to private funding sources and the significant deleveraging of recent years, Mr O'Leary said.