Interest rates on State savings schemes to be reduced
The interest rates on several State savings schemes are to be reduced, the National Treasury Management Agency has announced.
The changes will also impact the prize bond fund, which has been growing in popularity.
Under the changes, the prize fund allocated to the bonds is to be cut, which will reduce the amount of prize money that consumers will be entitled to claim.
Close to €4bn in prize funds are owned by consumers here.
The variable interest rate used to calculate the prize fund will drop from 0.5% to 0.35%.
The NTMA has also announced that four prizes of €250,000 will be up for grabs in the last weekly draws in March, June, September and December.
Previously, the last weekly draws in June and December offer two €1m prizes – the change will see €1m wiped off the top prize fund.
A weekly top prize of €50,000 will be unchanged, as will the other weekly prizes offering ten people the chance to win €1,000, ten €500 prizes and prizes of €50.
The sale of prize bonds has boomed since the pandemic began, with people investing savings in the scheme.
An individual can invest as much as €250,000 in bonds, offering a secured investment.
There was an increase of 92% in investments in prize bonds last year. But the changes will irk customers, many of whom invest not only to secure their cash, but also for the potential to win money.
Other savings products operated by the NTMA are also to face changes.
Savings Certificates, Instalment Savings, National Solidarity Savings Bond and Post Office Savings Bank deposit accounts are all to face interest rate changes. All are being cut.
In a statement to RTÉ News, the National Treasury Management Agency said: “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.”