Deposit rates set to increase - Finance Minister

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homeboy

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According to Irish Independent 21/08/23 Finance Minister Michael McGrath has said that deposit rate increases are "imminent" from banks and State Savings.

We await further announcements with great.............interest!
 
Won't hold my breath. When it comes to this Govt they operate on the dollar short and a day late principle.
 
From Breaking News:

"I do anticipate that we will see increases in the weeks ahead in the rates of interest being paid by banks on certain savings and deposit accounts."

"I think the market conditions are such that such increases are justified, they are commercial decisions for the banks, but I certainly expect and anticipate that we will see improvements in the rates being paid over the weeks ahead.

"While the banks have not fully passed on the increases in interest rates to mortgage holders, they have passed on even less of the increase in the ECB interest rate to savers and depositors."

"I do think that mismatch will now be addressed. We will see progress on that over the coming weeks."Mr McGrath also said that he has had discussions with the National Treasury Management Agency (NTMA) who are responsible for various State saving products.

"I know that they intend to bring a proposal to their own board next week which will then make its way ultimately to me for sanction - that will involve an improvement in the rates of return being paid on some of the State savings products being offered by the NTMA. I do think we will see progress in the future in the coming weeks on both of those fronts."
 
There's a sense of excitement around AAM, reminds me Christmas (or for the adults amongst us Budget day).

Channeling my inner mystic meg I foresee a 3% (maybe even a 4%) in the future. If I really strain myself it looks like it will take the form of a 'new product' akin to a regular savers type product. Maybe locked in for 1 year with a monthly limit of €400- 1k. Of course this payment will have to be made from an eligible - fee attracting - current account held in the same bank. Now if you dare touch this beautiful balance at any point it will cause the rate to plummet to near zero. Year 2 rate to be decided in the obscure and undefined 'future'.

In short a headline grabbing rate but enough restrictions that it won't materially impact banks cost of funding or satisfy any saver to any great extent.
 
The Journal article on this here.

On one hand, good news that the media pressure on the banks to increase deposit rates might be helping.

On the other hand, Michael McGrath has said that the increases will be on "some" deposit products. So the devil will be in detail.

Thus far banks have made little to no changes on rates where most deposits are, i.e. in current accounts, on-demand deposits and notice deposits. In addition, banks have not increased term deposit rates by anything like what many European banks have. And regular saver rates are well below where they were last time at this stage in the interest rate cycle especially with PTSB only paying 1%. So it will be interesting to see what the banks do this time. Maybe we will see more window dressing via highly selective increases and/or maybe we will see some new products.

A proposal goes to the NTMA board next week on new State Savings rates for certain products. I wonder if that means Sunday week for the increases?

Indo reporting that bank deposit rate increases are "imminent".
 
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“Imminent” sounds like an Independent embellishment. It’s certainly not the kind of word McGrath uses. He is usually very precise about his choice of words, irrespective of which side of his mouth he is speaking from.
 
Instead of all the blah, blah, ... and talk of pressuring banks to up the Savers Rates, the simplest and most effective thing the Government could do is to instruct the NTMA to increase interest rates on all Saving certs and products immediately to 3% or 4%, publicise this widely including how to apply online and watch as thousands of savings start leaving the banks

This would have an immediate effect on the savings rates offered by the banks

Most people are not going to move savings to Raisin, Advanzia or other EU countries - the only realistic alternative to the banks is State Savings
 
jpd said:
Instead of all the blah, blah, ... and talk of pressuring banks to up the Savers Rates, the simplest and most effective thing the Government could do is to instruct the NTMA to increase interest rates on all Saving certs and products immediately to 3% or 4%, publicise this widely including how to apply online and watch as thousands of savings start leaving the banks

This would have an immediate effect on the savings rates offered by the banks
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I reckon the government would see this as denting bank profits, which they may not want to do given the history of near collapse. Better to let them rip off the consumer.
 
I'm not holding my breath on Irish banks raising deposit rates to anything close to what can be gotten via Raisin or other European banks. Looks like a case of put a microphone in front of a politician and he'll give you something to report. Really silly season stuff that and Mc Grath's comments about the Iron Man won't change the world. Journalists always happy to fill copy.
 
he hasn't said to what rate they will increase. any increase would be welcome, but they may still not be paying anything close to ECB. And with a recent ECB hike, they should be increasing rates anyways.
 
Finance Minister says that deposit rate increases are "imminent", hopefully this is not some Quid Pro Quo on the future of the Bank Levy
 
Didn't the FM also say 'energy price reductions are imminent' too ?
.. but also they can't interfere in the markets (banking or energy). I'm confused :cool:
 
Hi all, do I understand correctly that if I'm interested in signing up for a State Savings product, I should wait a few weeks as it's likely NTMA will announce an interest rate increase across their products? (I'm thinking of the instalment savings 6-year product, it's for a house deposit).

(In case someone asks why I'd go with State Savings and not a bank savings account, it's because I've had such a bad experience with AIB's online saver, which is confusing as heck that I just want to have a "set it and forget it" place to save with no messing or surprises. I'm also not confident I can handle the tax aspect competently if I were to choose the likes of Raisin / Lightyear etc.)
 
This whole deposit rate increases thing just highlights the lack of financial literacy among the general public, politicians and media. McGrath announced recently that increases should be coming soon. Now the banks have put up rates on some select products such as term deposits and regular saver accounts with plenty of restrictions. Of the €150bn on deposit I'd imagine these increased rates cover a tiny fraction so banks will continue to rake it in. Yet it's now being presented by the politicians and the media as the banks finally catching up and "job done". It's nothing but window dressing and they need to be called out on it. The media seem to just take the bank PR release and run with it as a story with no questions asked.
 
Djimi Traore said:
This whole deposit rate increases thing just highlights the lack of financial literacy among the general public, politicians and media. McGrath announced recently that increases should be coming soon. Now the banks have put up rates on some select products such as term deposits and regular saver accounts with plenty of restrictions. Of the €150bn on deposit I'd imagine these increased rates cover a tiny fraction so banks will continue to rake it in. Yet it's now being presented by the politicians and the media as the banks finally catching up and "job done". It's nothing but window dressing and they need to be called out on it. The media seem to just take the bank PR release and run with it as a story with no questions asked.
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What would you want? Banks to ring their customers to tell them to change accounts? I have been a customer in an Irish bank for 25 years. To get the best interests, one always had to shop around and informed themselves. I had bank accounts in other juridictions, it was exactly the same.
 
Premos said:
What would you want? Banks to ring their customers to tell them to change accounts? I have been a customer in an Irish bank for 25 years. To get the best interests, one always had to shop around and informed themselves. I had bank accounts in other juridictions, it was exactly the same.
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I think the points Djimi made were quite an accurate assessment of how the banks are operating. It is a failure of the media & government not to point this out. In other larger jurisdictions there is a more competitive market so market forces and competition regulate against this kind of behavior. Ireland is just too small and our banking sector tiny with only three real banks so cartel forces come into play.
 
I don’t really have a big issue with banks offering near zero interest on demand deposits.

But it’s definitely positive to see rate increases on fixed-term deposits.

I would expect the NTMA to follow suit with meaningful increases to the rates offered on State savings products in the coming weeks.
 
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