Bank of Ireland has announced a 0.25% reduction in interest rates on its 12 and 18-month fixed-term deposit accounts, with the changes set to take effect on Tuesday, February 18.
This marks the second such cut this year, following similar reductions in January. However, the bank has confirmed that rates on other savings products, including the SuperSaver regular savings account, Advantage 6-month Fixed Term deposit account, Notice Deposit account, and MortgageSaver account, will remain unchanged.
Customers who have already begun the process of opening a 12 or 18-month term deposit account can still avail of the existing rates if they complete their application by the close of business on February 17.
Wider Market Trends and Future Predictions
The move by Bank of Ireland follows a wider trend of deposit rate cuts by major financial institutions. According to Daragh Cassidy, head of communications at bonkers.ie, several banks have already slashed rates since the start of the year.
- German digital bank N26 has implemented two rate cuts in 2024.
- Dutch bank Bunq lowered its top savings rate from 3.36% to 2.67%.
- AIB also reduced rates on two of its fixed-term deposit accounts by 0.25 percentage points.
With the European Central Bank (ECB) expected to cut interest rates at least two or three more times this year, Cassidy warned that further reductions from Irish banks are almost inevitable in the coming months.
Irish Savers Urged to Act Fast
Cassidy cautioned that by the end of 2024, the best savings rates on the market could drop to around 1.50%—half of what is currently available. Despite higher interest rates being available in recent months, many Irish savers have been hesitant to move their money, leaving large sums in accounts earning little to no interest.
“Those with savings really need to take action before rates fall further, as there is not much time left,” Cassidy advised.
The latest round of rate cuts signals continued pressure on savers, as banks adjust to an environment of anticipated ECB rate reductions. Experts suggest that those looking to maximize returns on their deposits should explore alternative savings options or lock in existing rates before further cuts take effect.