Allied Irish Banks (AIB) has lowered its one- and two-year fixed-term deposit rates, following a trend among Irish lenders to reflect the European Central Bank's (ECB) rate cuts over the past year. The bank is reducing rates by 0.25 percentage points, while also lowering the minimum balance requirement for fixed-term deposits. AIB's move follows similar actions by Bank of Ireland, neobanks Revolut and N26, and online savings marketplace Raisin.
AIB has become the latest Irish lender to start cutting customer deposit rates , joining Bank of Ireland and neobanks operating in the market, following a raft of official rate cuts from the European Central Bank last year. Photograph: CollinsThe bank said it is cutting its one- and two-year fixed term rates by a quarter of a percentage point, to 2.25 per cent and 2.77 per cent respectively, from Thursday.
“The ECB decreased rates four times over the last year, with a cumulative ECB decrease of 1 per cent. AIB has not reduced any of its saving rates during that period, however, reflecting the level of ECB decreases. AIB is now reducing rates by 0.25 of a percentage point on two fixed term savings products,” the bank, led by chief executive Colin Hunt, said in a statement.
Consumers have also been slow to move money into higher-rate accounts in recent years. Almost 87 per cent of the total of €161.5 billion of Irish household savings were held in on-demand or current accounts, where they were earning an average of just 0.14 per cent in November, according to the Central Bank.
Bank of Ireland moved two weeks ago to cut rates on certain deposit products. Neobanks Revolut, which operates in Ireland through a Lithuanian banking licence, and German-based N26 have each reduced savings rates on offer to Irish customers since in the past five months.
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