Arecent study by the Central Bank revealed that Irish consumers’ preference for shorter-term, more accessible deposit account types, relative to average euro area household behaviour, cost them almost €800 million in unearned interest in 2024 alone. This is in spite of a series of ECB interest rates rises since 2022, which meant that deposit term accounts were more attractive than in the previous few years.
“This was an eye-catching statistic for us,” said Eoghan O’Hara, Country Head, Ireland, at Raisin Bank. “The Irish household preference for short-term or overnight savings accounts or even current accounts is costing them millions in lost interest. When you break that down loss per capita, the numbers are quite stark.
“Another statistic that was quite eye-catching – for us anyway, as we're a European-wide platform – Irish households have 90 per cent of all their savings or deposits in these easy-access accounts, which compares to an average of 55 per cent in the eurozone. So, we're a little bit behind the times as a savings nation.”
When asked about the reasons for this, O’Hara believes a number of factors come into play. “I think for some, there’s a sense of foreboding that something might happen, and they would need to have access to cash – maybe that's within our nature. But people should really take the time to look at the options available to them. Savers should consider diversifying their savings and put an amount they’re comfortable with in a term deposit to get the benefit of a fixed interest rate while also having enough savings to hand if something unexpected pops up”.
With only three pillar banks left in Ireland, there’s also a little of “fear of the unknown” with looking beyond Ireland for better deals – but O’Hara says that European Deposit Guarantee scheme should ease those fears. “The scheme is harmonised; it's not just an Irish protection policy; it's in every European Union country. Savings are protected up to €100,000 per bank. Once you're a European Union or European Economic Area resident, you are covered by the guarantee when banking with a European Union Bank. And that's regardless of whether you're living in the country where the bank is domiciled.
O’Hara is the country lead for Ireland at Raisin Bank, a large online savings platform established in Germany in 2012. “Berlin is our head office, but we also have our own bank, based in Frankfurt. The Irish platform came online in 2019. The idea behind Raisin is to use the benefit of the freedom of movement of capital within the European Union to provide savers more choice for their savings.
“We pride ourselves on the fact that we opened the European deposit market to Irish savers. That's, our whole ethos. So, you sign up with us once online, through our website or our app, and it's completely free of charge. We never charge our customers any fees. And then you get access to 27 banks across Europe.
“At the moment, we have 10 instant access accounts from banks across Europe. We have 130 fixed term deposits ranging from three months to five years. So, we do genuinely have something for everyone. We recently won the Best Savings Provider in Ireland at the Bonkers.ie awards, which I believe is testament to what we are providing to Irish savers.”
Irish households have 90 per cent of all their savings or deposits in these easy-access accounts, which compares to an average of 55 per cent in the eurozone. So, we're a little bit behind
Raisin’s huge amount of choice takes full advantage of the European Deposit Guarantee scheme too. “We cap the amount any one of our customers can save with each individual bank at €100,000. But as we have 27 banks, you can spread your savings across our partner banks.
“As I mentioned before, perhaps people have a fear of locking their money away or are unfamiliar with term deposits, but we have accounts with terms from three months up to five years. Your money can make money by simply sitting in an account for a few months or a year. At the very least, your money needs to be beating inflation; otherwise not only are you not making money, but you’re also actually losing money, and your nest egg is getting devalued.”
With a dedicated Irish customer care team, O’Hara says that Raisin is leading the way in giving more choice to Irish consumers than ever before. “We are very much committed to the Irish market, and we offer a personal service for Irish savers with our dedicated customer care phone line. This time last year, we had about 10 partner banks available to Irish customers. Now we have 27; that that could be up to 40 by the end of the year. We're really trying to bring more choice on onto the market for the Irish consumers.
For more information, and to open an account, see www.raisin.ie/businesspost/