The money held on deposit by Irish households has risen by €5.2 billion (3.4 per cent) so far this year as savers move more money into accounts with higher interest rates.
Retail banks have been criticised for failing to increase their deposit rates in line with European Central Bank (ECB) levels while reporting big annual profits.
Banks insists, however, that Irish savers have been slow to move their money out of low-yielding overnight deposit accounts and into accounts with higher interest rates.
The latest Central Bank of Ireland figures show household deposits increased by €1.4 billion in August and stood at €157.7 billion at the end of the month. This was driven by increases in overnight and term deposits during the month worth €0.6 billion and €0.7 billion, respectively.
On an annual basis, household deposits recorded a net increase of €5.2 billion, driven by deposits with an agreed maturity up to two years, which increased by €8.3 billion.
The regulator noted that overnight deposits dropped by €3.9 billion in the year to the end of August and have been falling for eight consecutive months. “While overnight deposits fell by 2.8 per cent in the year to end-August, this was offset by another significant increase in deposits with an agreed maturity of up to 2 years,” it said.
“This is contributing to keeping the share of overnight deposits slightly under 90 per cent of total household deposits,” it said.
“This preference for term deposits is evident since the beginning of the year and is likely driven by higher interest rates on offer on these deposit types,” it said.
- Sign up for the Business Today newsletter and get the latest business news and commentary in your inbox every weekday morning
- Opt in to Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Join The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
