Savers in Ireland Continue to miss out on Maximising the Return on Their Savings

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Derek Keogh, Head of Personal Savings at Anglo Irish Bank discusses recent official data which shows that the majority of savers lose out by not taking action to switch their savings from low rate payers.

For the average saver, with €20,000 on deposit they could be earning over €500 more gross interest based on taking action to move from the low rate account.

Choosing the right account for you isn't always a straight forward decision. There's so much choice on the market and accounts can vary widely. However, doing something is better than doing nothing as the potential to greatly increase interest returns exists. Derek Keogh from Anglo Irish Bank answers some of the most frequently asked questions by savers regarding savings accounts.

"Given the wide range of products available in the market paying rates of up to 3.5% gross/AER fixed compared to low average rate that savers are actually earning (0.63% gross/AER variable for overnight / demand funds according to the Central Bank of Ireland's latest statistics)", Mr Keogh comments. "For the average saver, with €20,000 on deposit they could be earning over €500 more gross interest based on taking action to move from the low rate account." To ensure savers are comparing like-for-like, they should be familiar with the following terms as part of the comparison process:

  •     Gross: This term generally means before deductions, when banks are promoting their products you will often see the interest rate followed by the term "gross". This will generally mean the rate of interest earned on a deposit account for the duration and before the deduction of tax.
  •     AER: This shows you what the interest on a savings account would be if the interest was compounded and paid out to you each year (instead of monthly or over any other period). You may earn less than the AER because your money may not be invested for as long as a year. Sometimes firms use Compound Annual Rate (CAR) instead of AER on savings and investment products.
  •     Fixed Rate / Term Accounts: With fixed-term deposits you put money into your account for an agreed amount of time. Usually the interest rate is fixed for that period and if you take money out during that time you may pay a penalty.
  •     Variable Rate Accounts: Variable rates rise and fall in line with general interest rate changes in the euro zone. Variable rates offer the most flexibility (over fixed rates) and allow you to withdraw part or all of your funds without having to pay any fees or penalties.
  •     Notice Accounts: This is a savings account on which the customer is contracted to give a specified notice period before making a withdrawal. A penalty may be imposed by the bank providing the account if a withdrawal is made prior to or without the agreed notice period being undertaken.


The material contained in this article is for general information purposes only and does not constitute investment advice or an offer to buy or sell or a solicitation of any investment products or other financial product or service. You should not act or refrain from acting on the basis of any material contained in this article without seeking appropriate professional advice. All information is provided "as is" and without warranties express or implied and Anglo Irish Bank Corporation Limited accepts no liability whatsoever for any inaccuracies, errors, omissions, opinions or misleading information or for any action taken or not taken in reliance on the information in this message. Any expressions of opinion are current opinions as at the date of publication and are subject to change without notice.

Anglo Irish Bank Corporation Limited is regulated by the Financial Regulator in Ireland.

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Anglo Irish Bank Corporation Limited
Stephens Court
18/21 St. Stephens Green
Dublin 2

+ 353 1 6162000


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