Permanent TSB, one of Ireland’s leading banks, has recently announced a 0.5% increase in the interest rates offered on its fixed-term savings accounts. This decision comes as the European Central Bank (ECB) is expected to announce further rate hikes in its upcoming meeting next week. The ECB is anticipated to raise interest rates by 0.25%, marking a total increase of 4% since July of last year.
In a statement, Permanent TSB stated that the 0.5% increase will be applied to its fixed-term deposit accounts ranging from 12 months to five years. As a result, the bank’s 12-month and 18-month fixed rates will rise to 1.75% and 2.00% respectively. Additionally, the three-year and five-year rates will increase by 0.5% to 2%. The rate on the six-month fixed-term deposit will also see an increase of 0.25% to 1%.
Darragh Cassidy, a representative from the price comparison website Bonkers.ie, highlighted that the rate increases offered by Irish banks for deposit accounts still pale in comparison to other eurozone countries, where rates of up to 3.5% are offered. Cassidy also noted that Irish banks, including Permanent TSB, have been slow to pass on recent ECB rate increases to their mortgage customers. This has resulted in savers effectively subsidizing mortgage customers over the past year.
The new deposit rates offered by Permanent TSB will take effect from August 9th. This marks the fourth deposit interest rate increase announced by the bank since November of last year. Following the upcoming meeting, the ECB is not scheduled to discuss further monetary tightening until September. It remains uncertain whether another rate hike will be implemented at that stage or if the ECB will maintain the rates.
In June, inflation in Ireland stood at 6.1%, a decrease from the 6.6% recorded in May. Meanwhile, Eurozone inflation for June was higher than expected at 5.5%.