Ireland boosts State Savings returns for customers

Ireland State Savings is increasing the returns available on a range of fixed-term savings products, while the fund for Prize Bond winnings is also being increased. The changes will come into effect from 30 August, with the variable rate used to calculate the monthly Prize Bond fund increasing from 1% to 1.5% from 1 September.

The rate on a three-year Savings Bond will rise by 0.64 percentage points to 1.96%, while the five-year Savings Certificate rate will increase by 0.55 points to 2.29%. The six-year Instalment Savings rate will rise by 0.58 points to 2.33%, while the 10-year National Solidarity Bond rate will increase by 0.65 points to 2.66%.

The total return on the products will also increase. The three-year Savings Bond will offer a 6% total return, up from 4%, while the five-year Savings Certificate will rise from 9% to 12%. The six-year Instalment Savings total return will increase from 10% to 13.5%, while the 10-year National Solidarity Bond will rise from 22% to 30%.

They are tax free. The variable rate applying to all Post Office Savings Bank (POSB) deposit accounts will also increase by 0.5 percentage points to 1.25%. Deposit interest is subject to Deposit Interest Retention Tax (DIRT).

The NTMA is also increasing the Prize Bond fund to 1.5 times its current level. Around 10,000 prizes are expected to be awarded every week, based on the current number of Prize Bonds in circulation. The top monthly prize of €500,000 will remain in the final weekly draw of each month, while the top prize in every other weekly draw will double from €50,000 to €100,000.

Each week, 50 prizes of €1,000 will be awarded, replacing the current structure of 20 €1,000 prizes and 20 €500 prizes. The remaining weekly prize fund will be distributed in €100 prizes, up from €75. Prize Bond winnings are also tax free.

Dave McEvoy, NTMA Director of Funding and Debt Management, said retail savings are “an important element of the NTMA’s funding strategy”. He said the agency seeks “a balance between providing customers with a safe and competitive savings option and providing long-term value to the Exchequer in terms of managing the cost of borrowing.”

Tánaiste and Minister for Finance Simon Harris said: “I very much welcome today’s announcement by the NTMA to increase these rates as a measure that will help people who are saving and investing and want to make their hard-earned money go further.

The Ireland State Savings Digital Development Programme has improved accessibility and convenience for customers, complementing the traditional service provided through the post office network. Ongoing digital enhancements have made it easier for customers to access and manage their savings, improving the customer experience.