LAST UPDATE | 1 Sep 2023

AIB HAS ANNOUNCED an increase in interest rates for both AIB and EBS deposit accounts while Avant Money is also to hike its offering. 

The bank said the change will benefit savers, as its AIB Online Saver account will now offer a 3% return from €10 to €1,000 per month for 12 months.

AIB is also increasing all AIB Fixed Term deposit rates, with its 2-year term deposit account increasing to 3%, and its one year term deposit account increasing to 2.50%, and its one month term deposit account increasing to 1.50%. 

These fixed rate changes will be available from 12 September, with other interest rate changes available from 19 September. 

Separately Avant Money said rates on its three, four, and five-year short-term fixed lending products were increasing by between 0.15 and 0.25%.

This will move their rates to 3.85% and 4.1%, depending on the term and loan to value ratio. They are also introducing a 0.25% on variable rates.

Longer term fixed rate products are to stay unchanged.

State savings

The National Treasury Management Agency (NTMA) has also announced that interest rates on state savings are to go up.

Prize Bonds will now carry a 1% interest rate, up from 0.35%.

Interest on three-year savings bonds will increase from 1% to 4%.

Five-year savings certificates, which currently have an interest rate of 5%, will increase to 9%.

Finance Minister Michael McGrath welcomed the new state savings rates, saying: “It has been widely discussed that the interest rate environment has changed significantly over the last 12-18 months.

“This will provide State Savings customers with an increased return on all new fixed-term savings and deposit accounts, along with an increased Prize Fund for Prize Bond holders.”

The full list of new interest rates for state savings schemes is available to read here.

Pressure on banks

The announcements come after banks have been under pressure to give better returns to Irish savers, as Irish banks are currently the worst at passing on rate gains compared to the UK, the US, the Eurozone and 18 other European countries. 

Despite nine consecutive interest rate hikes by the European Central Bank, Irish banks have been quicker to pass this rise on to mortgage borrowers than they have been at passing it on to savers. 

The Government has been called on by the opposition to intervene and push the banks to do more for savers, but a spokesperson for the Department of Finance last month said that the Government isn’t in a position to take this kind of action. 

Previous to today’s announcement from AIB, the best interest rate on a monthly saving account with an Irish bank was 2% AER. 

AIB is now bringing in a better interest rate for a variety of savings accounts.

AIB Junior and Student Saver rates, and the EBS family savings rate are increasing to 3% as well, and the EBS children and teens savings rate is increasing to 2.50%. 

Elaine Downey, AIB’s Head of Products, said that the bank is pleased to announce “another significant increase on the returns to AIB and EBS savers” across various accounts. 

 ”The AIB Online Saver, which delivers a 3% rate for Regular Savers, can be opened in minutes on the AIB Mobile App, online or in branch and customers can get instant access to their savings without penalty.

“For customers who have larger sums to save for longer periods, we have increased all our Fixed Term deposit rates. 

“We encourage all customers to review our savings and deposit offerings to see how they can earn more on their savings,” she added.