Your Money

Savers favour term savings accounts in 2024 to avail of high rates

Household savings in low interest demand deposit accounts declined by €962m in the year, Central Bank reports

Household savings were up by 4.5 per cent last year, or €6.9 billion, as consumers put €7.3 billion into accounts with an agreed maturity of up to two years. Photograph: Alan Betson
Household savings were up by 4.5 per cent last year, or €6.9 billion, as consumers put €7.3 billion into accounts with an agreed maturity of up to two years. Photograph: Alan Betson
Ian Curran
Fri Jan 31 2025 - 13:32

Irish households put an additional €6.9 billion into savings with banks and other financial institutions in 2024 compared with 2023, with a focus on term-savings accounts that offer higher interest rates.

New data from the Central Bank published on Friday reveals that household deposits dipped by €264 million in December, primarily driven by a €671 million decline in overnight deposits as people funded their festive spending.

On an annual basis, total household deposits were up by 4.5 per cent on 2023, or €6.9 billion. Consumers put €7.3 billion into accounts with an agreed maturity of up to two years. Overnight deposits, meanwhile, dropped by €962 million in the year.

Deposit rates hit their highest level in more than a decade last year as domestic banks responded to a record run of 10 rate increases by the European Central Bank’s (ECB) in the 15 months up to September 2023 as it looked to tame inflation.

READ MORE

With the ECB cutting its own rates four times last year, retail banks have since begun to reduce their own deposit rates, with Bank of Ireland cutting interest rates on its 12 and 18-month fixed-term deposits by a quarter percentage point earlier this month.

Meanwhile, the Central Bank said that net lending to households increased by €3.2 billion, or 3.1 per cent, last year.

This was mostly driven by loans for home purchase, which accounted for €2.5 billion of the total, it said, and “to a lower extent, by loans for consumption, with an annual flow of €952 million”.

Overall, bank lending flows to the private sector – including domestic and corporate borrowers – were positive at €1.2 billion in December, the Central Bank said, meaning total private sector lending increased by €6.5 billion or 4.5 per cent year on year.

  • 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
Ian Curran

Ian Curran

Ian Curran is a Business reporter with The Irish Times