KBC has announced that it will cut interest rates on its demand deposit account to 0.05% on April 7th.
Savings rates are continuing to tumble for Irish savers, with KBC the latest bank to take the proverbial surgical knife to the returns being offered to customers.
Just last week, Bank of Ireland cut its Demand Deposit rate from 0.01% to the rock-bottom figure of 0.00%, and AIB took the rates on a range of its deposit accounts down to 0.01%.
And on April 7th, the rate of return available to savers with a KBC Demand Deposit Account will fall from 0.15% to 0.05%.
KBC's fresh cut in context
To put KBC's pending new rate in context, let's look at an example.
If you put €10,000 away for a year in an account with a rate of 0.05%, you will see a return of just €5 at the end of the 12-month period.
But that’s before DIRT, which currently stands at 39%, is taken out.
Once the government has taken its cut, you’ll be left with just €3.05 in returns for the €10,000 you locked away for a year.
What are the best savings rates currently available?
Savers in Ireland are finding it increasingly difficult to figure out the best place to stash their hard-earned cash these days, making it all the more important to regularly compare savings rates.
Despite the continuing cuts, there are still decent returns available, if you know where to look and are willing to adapt to certain restrictions.
For example, EBS’s Family Saver Account currently offers a rate of 3.00%, but it requires you to contribute monthly and has a maximum monthly contribution of €1,000.
For lump sum savers, the rates aren’t as attractive, unfortunately.
At the time of writing, KBC's 12-month fixed rate account is offering a return of 0.80%, which will give an after-DIRT return of €48 on a lump sum of €10,000 locked away for a year.
Permanent TSB is offering a 0.75% rate for lump sum savers.
KBC's digital-first strategy
On February 9th, KBC re-stated its commitment to the Irish market and is in the process of implementing a new digital-first strategy.
The bank was the first to make it possible for customers to open a current account from their mobile phone and it recently made Android Pay and Apple Pay available to customers.
It appears that it is the bank's current account customers, rather than its savers, that are getting all of the good news these days. But that seems to be the case with almost all of Ireland's leading banks at the moment.