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Image Simon Moynihan
Staff Writer

Want to lock your money away for a decade? We didn’t think so!

Sure, December is a funny time to be looking at bank accounts, but then Christmas is a funny time for a budget too. And when the government decided to attack our savings again last week with yet another DIRT hike, we thought we’d strike back with a review of some of the best savings accounts.

While there are all sorts of accounts out there, we’ve always been partial to the sensible straightforward kind. We like demand accounts because you can put money in and take money out whenever you want. But many of these demand accounts pay horrendous interest, often as little as 0.01%, which is why we went looking for ones where you can actually earn something with your hard earned savings.

Now before we get started, we’d better qualify one of our calculations. Believe it or not, there’s actually a lot of money on deposit in Ireland. In overnight accounts alone, there’s a remarkable €31,731 on average per household. Overnight accounts are the ones you can take money out of whenever you want. Now we know that’s an average figure and not everyone has that much cash, so for our purposes, we’ve decided to use half that amount - €15,865 – when working out how much each of the accounts we’ve reviewed would earn in interest in a year.

We’re pretty strict on what defines a decent demand account, so we’ve narrowed the field quite a bit. If an account pays less than 1%, we ignored it. If withdrawals are restricted, it also didn’t make the list. In the end we had three in the running and they are reviewed below.

KBC Smart Access Demand Account

The good

  • A terrific 3.25% AER variable
  • Earn up to €516 before DIRT, €345 after DIRT
  • Instant access - get your money whenever you want… sort of.
  • €100,000 threshold before the rate drops to 2.55%
  • Physical branches – KBC has two branches in Dublin and one in each of Cork, Limerick and Galway.

The not so good

  • €3,000 minimum deposit
  • Interest rate falls to 2.55% on the entire amount if account exceeds €100,000.
  • No online access. If you want your money, you need to fill in a form. Yes, in 2012, actual physical paper forms are required.
  • Spoiler - headline interest rate is set to fall to 3.00% on January 2nd

We say...

This account has a super interest rate for a demand account, but if you’re just getting started in the savings game, it might not be for you because the minimum €3,000 deposit amount is quite high. If you’re fortunate enough to have an account balance over €100,000, you lose 0.7% interest on the whole lot – which is not too bad actually as interest rates on accounts like this often drop by way more and on much lower balances. The Achilles Heel with this account is that it’s messy to withdraw your money.

RaboDirect Online Savings On-Demand

The good

  • A very decent 2.75% AER variable
  • Earn up to €436 before DIRT, €292 after DIRT
  • €1 minimum deposit
  • Instant access – get your money whenever you want
  • Very slick online “Money Mover” that allows you to move cash in and out of whatever current account, in whatever bank you want.

The not so good

  • No branches. RaboDirect is entirely online.
  • Interest rate drops to 2.15% on balances above €20,000 but not on the whole amount.
  • €20,000 threshold before interest rate reduces.
  • Spoiler - headline interest rate is set to fall to 2.45% on January 28th.

We say...

This account has a very decent headline interest rate for a demand account, and is a good savings starter account as the minimum deposit is just €1. Although the interest rate decreases at a fairly low €20,000, it doesn’t collapse completely, and the first €20,000 still earns the high rate. RaboDirect’s lack of branches may scare away some customers, but the ease with which money can be moved in and out stands highly in this account’s favour.

Permanent TSB Online Instant Access Account

The good

  • A totally respectable 2.50% interest rate
  • Earn up to €397 before DIRT, €266 after DIRT
  • Instant access – get your money whenever you want
  • No minimum deposit amount
  • €50,000 threshold before interest rate drops

The not so good

  • Interest rate drops to a measly 1% on entire balance for amounts above €50,000.
  • A Permanent TSB current account or Standard Instant Access Account is required to move money
  • No Permo payment account means paper, pens and cheques in the post.
  • Despite a strong branch network, you cannot withdraw from this account at a branch.

We say...

This account has a good headline interest rate, and is a good savings starter account as there is no minimum deposit. Although the interest rate decreases at a fairly generous €50,000, the rate collapses completely to just 1% on the entire balance. The withdrawal process means it would be really be best suited to Permanent TSB current account customers. This is a fine account that would suit many people, but isn’t for those with €50K or more.

Special mentions 

Ulster Bank Direct Saver Introductory Bonus Account

Ulster Bank’s Direct Saver is a fine account which offers 2.02% AER variable on balances of €5,000 and up. There’s also an introductory bonus of 1.08% which will give a rate of 3.10% in the first year. So why didn’t it make our top three? Well, we thought the €5,000 minimum balance was just a tad too high and the bonus is only for the first 12 months which means it has a higher minimum balance and lower standard interest rate than the rest of the accounts we’ve reviewed here. The big spoiler for us is that even though Ulster Bank calls this an instant access account, if you make a withdrawal, you’ll lose your interest for that month.

Nationwide UK Ireland Euro Easy Access Savings Account

This is another fine account earning 2.5% on balances over €2,000, but it’s not really a demand account so it didn’t make our list. You’re only allowed to make six withdrawals per year. Any more than that and you lose your interest for that month.

So what about the rest?

If you’re wondering why we’ve left AIB, Bank of Ireland and EBS out of this list, it’s because their demand accounts aren’t much good. The best of them is the AIB Direct Deposits Premium Demand account with a rate of 2.1%. There is no online facility with this account though and it’s actually a rebadged Anglo account which means it’s not available through AIB’s branch network. Then there’s Danske’s which offers 2.00% but don’t make any withdrawals or the rate goes to 1.00%.

 For the rest, you could expect to earn 0.03% at best, which will get you a fiver on your fifteen grand after a year. After the DIRT man takes his chunk, that fiver turns into just €3.

So which account offers best value? Here’s our view

3rd Place - Permanent TSB’s Online Instant Access Account

Permanent TSB’s Online Instant Access Account has no minimum balance and we like that. There’s also a generous 2.50% interest rate up to €50,000. We like that too. And with this account it is very easy to get at your money, but you really need a Permo current account so that counts against it. There’s also the issue that the interest rate collapses at €50,000 where you’ll get just 1.00% on the whole lot (if you’re lucky enough to have 50K that is!).

2nd Place - KBC Smart Access Demand Deposit Account

KBC’s Smart Access Demand Deposit Account offers the best overall return on your money. And if interest is your main priority, then it could be the bank for you. In our opinion, it falls down because paper form filling, and lack of online access makes it hard to get at your cash - and easy access is supposed to be the point of an instant access demand account.


WINNER - RaboDirect Online Savings On-Demand

RaboDirect’s Online Savings On-Demand account offers true demand flexibility, and we like that very much. You can put money in and take it out as often as you like which is the whole point of a demand account. The interest rate is good too. Sure, they are online only but this is 2012, you’re reading this on online and we figure you can manage a savings account without a branch. Overall, we feel that this account offers the best value when choosing a demand deposit account.