Permanent TSB increases interest rates for deposit holders - RTÉ Radio 1
Following Bank of Ireland (BOI), Permanent TSB (PTSB) has announced that it will increase its interest rates for deposit holders. From June, PTSB’s regular savers will receive an interest rate of 1% on their savings.
Daragh Cassidy, Head of Communications at bonkers.ie, appeared on News at One on RTÉ Rado 1 to discuss this latest announcement and whether we can expect to see more banks follow BOI and PTSB’s footsteps.
Listen to the interview above or look at the main points discussed below.
Main points from the interview
- Permanent TSB has become the latest bank to increase its interest rate for savers. Rates paid to deposit holders will increase by 0.25% from June. This follows a similar increase recently announced by Bank of Ireland.
- Although this is a pretty modest increase for savers, it does offer some consolation for deposit holders in banks and other institutions that haven’t seen any increase in interest rates for years.
- Although interest rates have increased heavily since last July, these rate increases have not been passed on to deposit holders, however, they have been passed on to mortgage holders.
- You can find out why savings rates in Ireland are so low here.
- However, these moves from Permanent TSB and Bank of Ireland will put pressure on AIB and other banks to increase their interest rates for deposit holders which is a good thing.
- Up until now, banks have enjoyed an improvement in their net interest margin, which is the amount of money they make between lending and holding deposits.
- In previous years, Irish mortgage rates were some of the highest in the EU, however, Ireland now has the third-lowest average mortgage rates in the EU. This is possible because the banks have been subsiding mortgage rates with the extremely low rates they have been paying on savings deposits.
- Although Daragh supports the increase in interest rates for deposit holders, he doesn’t believe that Ireland can have low mortgage and savings rates, it's one or the other.
- He is unsure what direction banks will take. Will they increase savings rates or keep mortgage rates low?
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