Bank of Ireland (B of I) will match the Government's 25 per cent bonus SSIA savings scheme for a six-month period when accounts mature. To avail of its equity savings plan, customers must invest half of their lump sum and continue to save for three years.
B of I's equity-based savings plan is available to existing equity SSIA customers as well as new customers and the minimum saving limit is €50 per month.
New customers must invest a certain level of money upfront, while existing equity SSIA customers must leave at least 50 per cent of their SSIA maturity fund invested in their policy.
The bonus will be invested on customers' behalf at the start of the plan and be released, along with accumulated growth, after three years if conditions are met.
B of I this week launched a range of products aimed at maturing SSIA accounts through various savings plans. A deposit account for the matured SSIA balance will pay a fixed rate of 3 per cent for the first three months and includes an option to avail of a 3.75 per cent variable interest rate for 18 months for new regular savings with a minimum savings investment of €5 per week.
B of I is also offering a two-year, short-term bond account with a six per cent fixed rate. The final option is a three- or five-year term deposit account offering a fixed rate of 2.8 per cent for the first year. No Deposit Interest Retention Tax (Dirt) liability applies to savings held for three or five years, which is equivalent to a 3.5 per cent gross before Dirt.
Dermot Murray, sales director at Bank of Ireland Life, said the bank expected an upsurge in new customers as its range of product savings plans so far rivals other banks SSIA saving-continuation offers.
While some SSIA account will mature in May, the vast majority will not pay out until April 2007.
B of I has introduced its range of savings options following market research that revealed the emergence of a savings culture in Ireland.
Its research found that 80 per cent of SSIA savers intended to continue saving when the scheme ends; 42 per cent intended to invest some or all of their lump sum; and 60 per cent were prepared to invest long-term.
Of those interested in long-term savings, nearly half expressed an interest in equity-based investments, primarily because these products were likely to have outperformed cash products over the life of the scheme by between nine and 15 per cent, according to the bank. Some 17 per cent said they intended to spend all of their savings.
Prior to the SSIA scheme, 74 per cent of SSIA savers did not have any regular savings, implying that attitudes towards saving have now changed.
