THE NATIONAL TREASURY Management Agency (NTMA) has said that interest rates for State savings schemes will be reduced, and the size of the Prize Bond Fund will also be reduced.
The NTMA, which manages assets and liabilities of the Irish State, said in a statement to TheJournal.ie that the new rates “reflect the reductions in interest rates in both Sovereign bond yields and the retail savings market”.
“State Savings interest rates were last adjusted in June/July 2016, with the exception of Prize Bonds where the rate for the Prize Bond Fund was adjusted in August 2017.”
The National Solidarity Savings Bond (10 Years) now has a total return of 10%, instead of a previous total of 16%. The gross Annual Equivalent Rate (AER) is now 0.96% when it was previously 1.5%.
Instalment Savings (6 Years) have a total return of 3.5% now, which was previously 5.5%. The gross AER is 0.63% and was 0.98%.
Savings Certificates (5 Years) have a total return of 3% which was 5%. The gross AER is 0.59% and was 0.98%.
The POSB (deposit account) had both a previous return and gross AER rate of 0.05% which is now 0.15% for both.
Prize Bond Fund
Prize bonds are available at €6.25 each; the minimum purchase of four costs €25. Prize bonds are entered into a weekly draw with prizes ranging in value from €50 to €50,000, with a €250,000 prize awarded four times a year.
The variable interest rate used to earn money for the Prize Bond Fund will reduce from 0.5% to 0.35% from next month, the NTMA said today.
The prizes have been reduced as a result. Now, four €250,000 prizes will be awarded in the last weekly draws in March, June, September and December.
Two €1 million prizes had been awarded in the last weekly draws in June and December.
The top prize in all other weekly draws is €50,000. The other weekly prizes are 10 of €1,000, 10 of €500 and all remaining prizes are €50.
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The 10 richest people in the world have got a whole lot richer since Covid-19 lockdowns. Your interest rates are cut because of this, albeit indirectly.
@Em Gee: The interest rates are cut because the simple fact is it no longer makes economic sense for the NTMA to raise funds through the likes of the NSSB, prize bonds, etc. Take the National Solidarity Savings Bonds as an example. Grand when the State was near broke and our borrowing rates were higher than the interest on the savings bonds, but now they are costing us money as the NTMA can now borrow in the market at negative interest rates on 10yr bonds. A mad situation which is not sustainable, but for the moment we should take as much advantage of it as we can.
@Em Gee: errrr no, not even indirectly. You have this exactly backwards. Equity prices rise when interest rates fall.
So Jeff Bezos and Elon Musk etc have gotten richer as an indirect consequence of interest rate cuts. This is an EFFECT of interest rate cuts, not a CAUSE.
@Kevin Collins: less of your common sense approach please. Dont you know the comments here are for bank/politician/capitalist bashing only. Said bashing will be by people of utmost clear consciences and absolute angels who never made a mistake.
There will be no sensible discussion, and if anyone starts saying such things, there will be a poll about it.
Perfect, will bring them in line with the banks i.e. totalluy useless. Put a safe in your house or invest in gold. Money in savings is a total joke in Ireland / Europe
@Christopher Byrne: Borrowings in Ireland, esp Mortgages,and Rainy Day savings are a total joke…….Anyone any ideas or suggestions of a safe to go giving a better return.
European central Bank needs to stop quantitative easing by printing money and pumping billions into economies. We all want low interest rates on loans but we don’t want tiny or negative interest rates on savings!
@Fionn Darland: if you have high interest in savings you will have it on loans too. You can’t have one high and one low.
@Cosmos20202020: if you bury your head in the sand is one end not low and the other high?
@Bat Cat says Kapow!: Maybe not it could be his rear end and bell end.
@Cosmos20202020: Obviously, but I am not suggesting high interest on savings – I am suggesting interest savings rates that are not negative! There is too much money on the supply side which is causing negative interest rates – this is crazy – not helped by QE imo.
Buy bitcoin
@cryptodon: balls deep already
@cryptodon: All grand, as long as you are sensible and never invest more than you can afford to lose. https://www.theguardian.com/business/2021/jan/11/bitcoin-be-prepared-to-lose-all-your-money-fca-warns-consumers-risk-productis-cryptoassets
@Tommy Roche: “Consumers should be prepared to lose all their money if they invest in schemes promising high returns from digital currencies such as bitcoin, a City watchdog has warned.”
Carefully worded there. It doesn’t mean investing in Bitcoin but in schemes and firms making claims about Bitcoin. Just buy it direct on binance or coinbase and wait 4 years, under the current pattern you will be in the green by then. Either that or sell it in September 2021
@Simon Barr: exactly, if you don’t own the keys you don’t own the coin . Lots of scams out there
@Simon Barr: if you bought ethereum back in March at 189usd your now 1k in profit.
But the bigger failing is not taking the profit!
10% on a 10 year investment. Great deal. They really need to simplify the rules around tax on investments in Ireland to open up investing to more people. The CGT exemption is still €1,270 and hasn’t been indexed since we got rid of the punt!
@The Guru: nonsense, you would forgo the 67% gain you get to keep yourself just because you have to pay 33% tax???
@DarraghLD: As far as I know all NTMA accounts are Tax free and Dirt Tax free too
Doesn’t say when the cuts will begin?
@Shaner Mac: looks like they’re already imposed. Just checked the state savings website.
@Shaner Mac: Right away unfortunately
@Shaner Mac: yesterday
We’re going to go nuts when this is done , we’re going to spend like never before . Inflation is going to go through the roof . Last place you want your money is in a bank or tied to the state
The Prize Bond system allows you to nominate a bank account to get winnings deposited into. It is to save them sending out cheques. You can check results online every Friday. However they still send out a letter saying your winnings have been digitally transferred to your bank account. If they stopped these unnecessary letters they could have more prizes.
Will the government just borrow a few billion euro for the current interest 0.01 and loan us all who have mortgages for the same rate. Give us all a break like
have your say