# NTMA Cut State Savings Rates - 5 October 2014



## Lightning (5 Oct 2014)

T?he NTMA have cut State Savings rates today. Press release below. 



> NTMA announces new issues of State Savings products and changes to interest rates
> 
> 5 October 2014 - The National Treasury Management Agency (NTMA) has today announced:
> 
> ...


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## Lightning (5 Oct 2014)

This cut was not unexpected given that the rates were out of line with deposit rates and sovereign yields. 

I will update the best buy threads. The new grossed up equivalents will follow at a later stage.


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## sebadoh (5 Oct 2014)

Not unexpected as you say. Appalling rates now being offered, hardly worth the hassle of having your money tied up for such a poor rate. Normally a couple of banks complain about state savings rates before these cuts, dont recall any this time.


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## The Ghoul (5 Oct 2014)

Not again  OK, we expected it but it is still bad when it happens!


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## theresa1 (5 Oct 2014)

'The new rates reflect the NTMA’s requirement to ensure that the rates paid on State Savings products are competitive.' 

Cutting ensures they are competitive - doesn't make sense to me.


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## patrickjd (6 Oct 2014)

As mentioned in another thread I bought EUR1200 worth of 3 yr bonds at 4% (aer 1.32%) last Friday. More luck than judgement in this case.


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## Lightning (6 Oct 2014)

theresa1 said:


> 'The new rates reflect the NTMA’s requirement to ensure that the rates paid on State Savings products are competitive.'
> 
> Cutting ensures they are competitive - doesn't make sense to me.



It ensures that the rates are more in line with their competitors. The NTMA were overpaying, versus the competition, prior to this cut.


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## Lightning (6 Oct 2014)

New grossed up equivalent AER rates attached below. 

These are the rates that banks would need to pay to match State Savings rates.


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## mcriot29 (8 Oct 2014)

http://m.independent.ie/opinion/editorial/editorial-savers-also-deserve-state-support-30640526.html
Post about savers


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## ardmacha (16 Mar 2015)

I first invested in State Savings about 2 weeks ago with all the ID etc. I get the impression that they send you a "customer card" making it easier to make subsequent purchases. How long will this take? I'd like to add a bit more the way things are going.


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## llgon (16 Mar 2015)

It's a few years since I got one, think it took a few weeks but can't be too exact.  Did you invest in a 4 or 10 year Solidarity Bond?  As far as I know these are the only ones the card applies to.  I can't understand why the card can't be used to purchase Savings Certs or Bonds.


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## sebadoh (19 Mar 2015)

the ntma sold €500m of 6 month bonds at a negative rate of interest today. I would expect the already woeful rates on state savings to be cut again very soon.

[broken link removed]
19 March 2015 – The National Treasury Management Agency (NTMA) has today completed an auction of Irish Treasury Bills, selling the target amount of €500 million. 

Total bids received amounted to €1.965 billion which was 3.93 times the amount on offer. The Treasury Bills, which have a maturity of six months, were sold at a yield of -0.01%.


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## Lightning (20 Mar 2015)

sebadoh said:


> the ntma sold €500m of 6 month bonds at a negative rate of interest today.



Negative yield, not a negative interest rate. 



sebadoh said:


> I would expect the already woeful rates on state savings to be cut again very soon



Yeah, the NTMA say that State Savings rates are linked to sovereign yields and deposit rates. State Savings products of all maturities pay well above sovereign yields now and for longer dated maturities pay well above deposits. Another drop is surely coming.


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## Lightning (30 Apr 2015)

NTMA State Savings products, as at today, are higher than deposit rates for all terms of 3 years and longer. 

Also, the gap between NTMA State Savings product rates and sovereign yields has grown in recent weeks. 

NTMA cut coming?


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## ardmacha (1 May 2015)

T-B-M said:


> It will probably take about a month for the card to arrive.
> 
> If you paid by cheque, they'll cash this early on. After 3-4 weeks you will get a statement/receipt of lodgement. About a week after that you will get the card.



Thanks for this, the card came after about 4 weeks, just before I was travelling so I was able to redirect some funds. 



CiaranT said:


> .
> 
> NTMA cut coming?



Bank holiday weekend!!


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## theresa1 (1 May 2015)

Just back from local post office getting another 10 year bond in case rate drops this weekend. My bet is it will happen June bank holiday.


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## Lightning (1 May 2015)

Always happens on a Sunday. Has it happened on public holiday weekends before?


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## theresa1 (3 May 2015)

Yes 2nd June 2013.


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## Lightning (4 May 2015)

Thanks, maybe history will repeat. State Savings rates are once again out of sync with deposit rate and sovereign yields.


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## ardmacha (9 May 2015)

Perhaps the State savings is not quite so out of sync after all
http://www.independent.ie/business/...rrowing-doubles-in-euro-turmoil-31204119.html

The Irish Government's borrowing costs have more than doubled since the last week in April to hit close to 1.5pc for 10 year debt at one stage yesterday.


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## Lightning (9 May 2015)

The 10 year State Savings rate, even after the recent increase in sovereign yields, is about 0.75% above the 10 year sovereign yield.


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## ardmacha (9 May 2015)

However, as I understand it bonds have a equal payment each year, while the State Savings payments are loaded towards the end. Assuming any inflation rate , the real cost of Sate Savings may competitive from the NTMA perspective.


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## Lightning (10 May 2015)

Sure, inflation is a factor. Another factor is the fact that the administration cost of State Savings products, per euro, is much higher than the admin cost of sovereign debt issuance. 

There are lots of factors that just comparable deposit rates and comparable sovereign yields but these are the only 2 factors that the NTMA publically state that they take into account when making State Savings rate decisions.


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## ardmacha (21 May 2015)

While this is only short term money, it does indicate how things are going 

NTMA sells €500m of six month Treasury Bills at a negative yield
http://www.rte.ie/news/business/2015/0521/702756-ntma-treasury-bills/


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