FT: Irish Banks Passing On Just 7% of Rate Gains To Depositors. Worst in Europe.

euroDilbert said:

I don't understand why the likes of Revolut and N26 don't offer savings accounts in Ireland (they do in other countries). I'm sure they would attract a lot of new account holders and siphon off some of the savings from the other banks.

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It would seem for the majority of Irish depositors this wouldn't be the case. Perhaps the bundling of current account services with a savings product might entice a few more but overall the masses are not willing or don't know about the benefits of an online bank.

From the banks perspective I'd imagine they're like Irish banks where they don't need any more deposits.

I think bunq offer a current account and savings products to Irish residents, so that might be an option.

Irish people can deposit their savings in a bank abroad if they are not satisfied with interest rates at home, Public Expenditure Minister Paschal Donohoe has said.

He added that it would not be "unpatriotic” for Irish citizens to put their money on deposit in other EU states if they can get a better rate of interest.
"But obviously, what I want to see happen here is for competitive rates of interest to be made available here to Irish savers. But they are commercial decisions, they are matters for Irish banks, to make those decisions independently of the Government.”

Brendan Burgess of the askaboutmoney website told the Irish Independent this week there are websites that provide Irish would-be depositors with a menu of interest rates elsewhere in Europe, and will act as a brokerage. European rates can be multiples of the returns available to savers in Ireland.

The best available rates from retail banks in Ireland are currently 2pc and only for a year with AIB, EBS and Bank of Ireland on regular savings or Permanent TSB with 2pc on a five-year rate for a lump sum. All are subject to Dirt tax at 33pc. Rates of up to 4pc can be achieved by going abroad. But that is also subject to Dirt that has to be paid here.

"I welcome the minister's comments, and Irish savers should take encouragement from his words and shop around internationally, once they have the proper guarantees,” Mr Burgess said last night.

"Too few people do it - a French or German bank will pay your interest earnings on a gross basis, but you must pay Dirt on it here. It is very worthwhile.”






Again though, "i want to see competitive rates of interest to be made available to Irish savers" - but no comment on Prize Bond 0.35%

Fair play to @Brendan Burgess for encouraging people to shop around.

I think it is important to caveat international shop-arounds with the fact that the vast majority of European and international banks do not allow Irish customers to sign up. But a small number do.

The EU should force banks to allow any EU resident customer to sign up to deposit products like they do with basic current accounts. This would seriously boost competition.

What are the websites with a menu of options that Brendan mentions? I wish there were more websites that did this - most that are out there are rubbish or inaccurate. I guess Brendan is referring to the Raisin website which lists the 8 or so banks that pay non-negligible interest or this website that lists even more!!

Lightning said:

Fair play to @Brendan Burgess for encouraging people to shop around.

I think it is important to caveat international shop-arounds with the fact that the vast majority of European and international banks do not allow Irish customers to sign up. But a small number do.

The EU should force banks to allow any EU resident customer to sign up to deposit products like they do with basic current accounts. This would seriously boost competition.

What are the websites with a menu of options that Brendan mentions? I wish there were more websites that did this - most that are out there are rubbish or inaccurate. I guess Brendan is referring to the Raisin website which lists the 8 or so banks that pay non-negligible interest or this website that lists even more!!

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What are the French and German banks Mr Burgess refers to ? What are the banks that allow Irish customers to sign up to ?

Roro999 said:

What are the French and German banks Mr Burgess refers to ? What are the banks that allow Irish customers to sign up to ?

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Thanks. Interested in non fixed term deposit accounts from a French or German bank. Looking through best buys I can see Latvia, Dutch, Lux guarantee schemes etc., but I'm asking about the big French and German banks that allow an Irish person to open a deposit account.

Most of EU banks asks for residency requirement when you try to open a bank account. Yeah there is EU directive about it but banks simply don't care. So you can either use Neo bank accounts or investment apps or use Raisin for having fixed term deposit accounts.

I don't think there is any EU bank that you can open account remotely without using middleman like Raisin.

barbaros said:

Most of EU banks asks for residency requirement when you try to open a bank account. Yeah there is EU directive about it but banks simply don't care. So you can either use Neo bank accounts or investment apps or use Raisin for having fixed term deposit accounts.

I don't think there is any EU bank that you can open account remotely without using middleman like Raisin.

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So when Mr Burgess refers to French and German banks I wonder if that's correct ?

Roro999 said:

Thanks. Interested in non fixed term deposit accounts from a French or German bank. Looking through best buys I can see Latvia, Dutch, Lux guarantee schemes etc., but I'm asking about the big French and German banks that allow an Irish person to open a deposit account.

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The vast majority of French and German banks do not allow Irish customers to sign up. Some allow it in-person but only a very small number allow it remotely.

One exception is BritLine (select the UK version of the website that applies to Ireland too) but a current account is mandatory and you will pay at least 110 EUR in current account fees per year and the non-resident tax on a Livret A (government savings product that pays 3% gross) is 30% on deposit interest and is not deductible against Irish deposit interest because it is a different type of tax than deposit interest tax and then you need to pay 33% to the Revenue on the remainder.

It is not correct to say that people can open accounts with French and German banks when it is a very hard thing to do / impossible in most cases unless one is talking about offers via Raisin.ie.

Our firm previously had a relationship with Deutsche Bank in Germany to open bank accounts for Irish individuals and companies. We are now seeing interest from Irish customers again. We have been in discussions re reestablishing this service. If Brendan allows it I can update if/when it is available again. The rates will not be as high as the Raisen type arrangements but much better than Irish banks i.e. 2.25% for 6 months deposit. There is also better service where you deal with a person rather than an online service.

Thanks Vincent

North Star said:

Our firm previously had a relationship with Deutsche Bank in Germany to open bank accounts for Irish individuals and companies. We are now seeing interest from Irish customers again. We have been in discussions re reestablishing this service. If Brendan allows it I can update if/when it is available again. The rates will not be as high as the Raisen type arrangements but much better than Irish banks i.e. 2.25% for 6 months deposit. There is also better service where you deal with a person rather than an online service.

Thanks Vincent

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Interesting. Let us know if you start offering that service and maybe we can consider adding it to the best buys list.

Do DB allow Irish customers apply online for an account? Their website is not clear. On their website, DB offer 3% for 1 year and 1% instant access and re-sell Raisin Germany which does not allow Irish customers.

D

North Star said:

Our firm previously had a relationship with Deutsche Bank in Germany to open bank accounts for Irish individuals and companies. We are now seeing interest from Irish customers again. We have been in discussions re reestablishing this service. If Brendan allows it I can update if/when it is available again. The rates will not be as high as the Raisen type arrangements but much better than Irish banks i.e. 2.25% for 6 months deposit. There is also better service where you deal with a person rather than an online service.

Thanks Vincent

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Would that option if reestablished cover terms of 3 months or indeed instant access?

Is it worth the added FX risk to look at the UK market if people can access?

My parents are based in the North and recently availed of Chase current account which now pays 4.1%!

Damm Brexit!

DublinHead54 said:

Is it worth the added FX risk to look at the UK market if people can access?

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I looked at this earlier this year as rates started to change and came to the following conclusion. I considered it both for deposits and for Premium Bonds as the yield is so much better than deposits and Prize Bonds. If you look at EUR - GBP exchange rate over recent years, the fluctuation appears bo be limited, generally within a 10% band. If you called it right, you'd make 10% plus the interest rate differential. If you called it wrong, you'd wipe out the interest rate differential and potentially a lot more. And there have been some sudden movements over the years, making it difficult to plan and easy to get caught, especially if you ever need to withdraw at short notice. Add in to that the political volitiaty in the UK over the last decade and their capacity for economic self harm, and it's a risk I don't need. I'd maybe consider 10% of my deposits, certainly no more. In the end my decision was to stay in Eur.

If you have sterling, and intend keeping it for the long term, its obviously different.