What you need to know

After a relatively prolonged period of minimal growth, the Irish savings account market has now entered a period of what will likely be stronger, steadier and sustained growth. As a result of economic recovery, job creation and increasing household income, consumers once again have the capacity to save – particularly in RoI – although buoyant consumer confidence may be reducing consumer motivation for precautionary saving.

In addition, low interest rates on savings mean there is little financial incentive to save. Overall, though, the expectation is that savings will grow strongly between now and 2021 (particularly in RoI). Consumer data (Toluna, November 2015) indicates that around a third of all consumers expect to maintain their current level of saving in the coming six months, while around four in 10 consumers expect to increase their savings in the same period. Mintel believes this to be a good indicator of where the market is headed.

Products covered in this report

This report analyses the various factors and issues impacting upon the savings market in Ireland. There are several different types of deposit and savings account available to RoI and NI consumers. Some of the terms mentioned in this report include:

  • Demand accounts include current accounts and other instant access-type accounts that allow consumers easy access to funds, requiring no notice. Sometimes called easy-access or instant-access accounts, these accounts do not generally impose any restrictions on withdrawals and provide either a variable interest rate or a fixed/guaranteed interest rate for an introductory period.

  • Fixed-term deposit accounts or bonds are accounts requiring consumers to commit to leaving their funds untouched for a specific period of time, which can be anything from one to five years. The account holder generally receives a bonus payment on maturity. Although most accounts do not permit withdrawals prior to the maturity date, those that do invariably levy a penalty. Normally, fixed-term deposit accounts entail fixed interest rates, and the funds invested are completely secure.

  • An Individual Savings Account (ISA) is a tax-free wrapper through which UK/NI savers can shelter cash, shares and insurance from income tax and Capital Gains Tax (CGT). Some ISAs wrap stockmarket investments, and are termed ‘stocks and shares ISAs’ or ‘equity ISAs’. The ISA scheme was introduced by the UK Government in April 1999 to replace the previous tax-free savings vehicles, PEPs and TESSAs.

  • Notice accounts are accounts that require consumers to give their account provider notice before the withdrawal of funds. Most financial services providers offer notice periods of 30, 60 and 90 days.

  • Regular savings accounts are accounts in which the holder is required to make regular monthly payments in return for a higher interest rate.

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