Banking

KBC becomes the third bank to cut savings rates this month

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Mark Whelan

Mark Whelan

Former Head of Communications & Events

KBC has announced a number of fresh cuts to savings rates, just weeks after Bank of Ireland and Permanent TSB did likewise.

Savings returns have been at rock bottom for some time, so you might be wondering when the banks will run out of room to cut rates any further.

Well, Bank of Ireland, Permanent TSB and, as of today, KBC are still finding a way.

KBC’s rate cuts

If you have a regular saver account with KBC, your rate of return will fall from 1% to 0.5% on August 4th.

However, if you have an Extra Current Account with the bank, you will have been getting a return of 3.00%, and this will only fall to 2.50%.

Similarly, if you have a standard current account with the bank, your rate will fall from 2.00% to 1.50%.

KBC has had some of the best regular saver rates on the market for the last while, so today’s news might leave you wondering what the next move is for you and your money.

Here’s a quick overview of the best regular saver rates available right now.

Bank

AER

Instant access

Max monthly deposit

EBS

3.00%

Y

€1,000

KBC (KBC Extra current account required)***

3.00%

Y

€1,000

KBC  (KBC standard current account required)***

2.00%

Y

€1,000

AIB

1.50%

Y

€1,000

Permanent TSB

1.25%

Y

€1,000

Bank of Ireland

1.20%

7 days’ notice

€2,000

***AER to reduce by 0.50% on August 4th

In addition to the regular saver cuts, KBC is also reducing the rate on its Smart Access Demand Account from 0.45% to 0.30% and the rate on its Select Access Demand Account from 0.15% to 0.10%.

July cuts

Since the beginning of the month, Bank of Ireland and Permanent TSB also announced further cuts to the rates on certain accounts.

Most notably, Permanent TSB shaved another 0.15% off the return being offered to consumers who want to lock more than €5,000 away for a year. The rate on the bank’s 1-year fixed rate deposit account now stands at 0.60%.

At this new rate, locking €10,000 away for a year will give you €60 back in interest. before DIRT. And once DIRT, which stands at 39%, is taken out, you’ll be left with just €36.60.

A week before Permanent TSB’s cut, Bank of Ireland cut its 12-month fixed deposit rate from 0.25% to 0.20%, which would yield around €12 after DIRT on a €10,000 deposit.

How low can they go?

AIB, Bank of Ireland, EBS, KBC, RaboDirect and Ulster Bank have all cut rates on at least one savings account so far this year, and in April, Nationwide UK decided to depart the Irish market altogether.

This has left consumers feeling increasingly frustrated by the lack of acceptable returns being offered by the banks.

The reward for putting €10,000 away for a full year wouldn’t even fill a petrol tank in Ireland at the moment, so it’s easy to understand why many consumers are feeling disillusioned. After all, it takes a lot of time and discipline to save up that amount of money.

Many savers would now be better off focusing on keeping a large sum of money in their current account to avoid fees rather than waiting out a notice period on a traditional savings account.

To find the best rates available for your requirements, it is important to compare your options and consider switching.

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