2-3 ECB Rate Increases Expected by Year End

Irish angst said:
They must all have very healthy balances and no excuses not to increase their interest rates
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This is the very reason that don't have to. If you walked into a supermarket and saw a loaf of bread advertised for €2 no one would expect you to pay €3. Why should banks be expected to act any differently.

The reality is the market (between Irish depositors and Irish deposit institutions) is functioning as any market would be expected. In the grand scheme of things there are very few of us that are willing to make an effort to search for better rates. So Irish banks don't need to pay up.

I do find it a little ironic that Irish depositors exhibit such home bias. They put so much stock in Irish institutions over and above foreign firms. You only have to look back to the financial crises and all our current banks were bust.

Depositor inertia is part of the issue. The other side of it is the banks have no need to compete on deposits because they have no use for those funds. They already have a large amounts of deposits that they cant lend out. Starting a deposit price war would do nothing other than undermine their margins for no reason.

Part of the answer is to improve depositor awareness about 1) better rates available out there, and 2) the harmonised protections afforded depositors across the EU. But information/education cant offset inertia.

In short we don't get rates we want (from Irish banks) but we get the rates we deserve.
 
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Irish angst said:
The main banks, credit unions and state savings are often the more trusted investment institutions still by older people ( regardless of the crash) So they should be encouraged to raise their very poor rates. Even the prize bonds are less advantageous than they were as even less prizes are awarded now. They must all have very healthy balances and no excuses not to increase their interest rates.
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Why would a business deliberately increase its own costs?

Banks are commercial businesses, their aim is to make profits. They have well-paid staff whose job it is to deliver low-cost deposits.
 
FT reporting today that traders think there is an 85% chance of another ECB rate increase in September (Polymarket has a 91% chance) with odds increasing of a further increase later in the year as inflation continues to increase.

"After the ECB decision, traders continued to bet on a further one or two quarter-point interest rate rises from the central bank coming before the end of the year, according to levels implied by swaps contracts, with a roughly 85 per cent chance that the first increase comes in September."

Some term deposit rates are reflecting this.
 
Which of the non Irish located banks are the easiest to open and close an account with ?

Never heard of most of the new ones mentioned above.

Asking for a friend who wants a better rate on 50k for a year than prizebonds are currently giving.
 
January25 said:
Which of the non Irish located banks are the easiest to open and close an account with ?
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While I haven't tried all of them from my experience most of the high interest banks are straightforward.

These days if you've a smart phone, a recent bill and an in date passport there's no reason why you couldn't get this done during an ad break.
 
ECB Watch is a great website. Good find.

Now 94% chance of a 0.25% rate increase to 2.50% in September 2026.

And over a 54% chance that the ECB Deposit Rate will be 2.75% or 3.00% after the December 2026 meeting.
 
ECB have increased the Deposit Rate by 0.25% as expected. Change is effective 16 September 2026.

Trade Republic will likely respond shortly. MMF rates will change on 16 September.

Will the Irish banks ignore this rate increase again or react?

Markets think there is over a 50% chance (as per ECB watch) of another increase by December.
 
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Lightning said:
Will the Irish banks ignore this rate increase again or react?
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Hope so. German 1 year bund up to 2.95% today... yet best the Irish banks can do is 2.00% on a one year fixed? Yeah no thanks. Middleman can be cut out nowadays.
 
The ECB Deposit Rate change becomes effective today.

Good to see Trade Republic pass on the full increase and T212 at least match or exceed the ECB Deposit Rate (for certain customers; albeit not a full pass on of 0.25%).

Good to see MMF yields increase in tandem with the increase as always.

Okay to see Monzo part-pass on the increase. Okay to see some Raisin.ie instant access rates increase but none proportional to the ECB increase.

Poor to see no response yet from Klarna and Revolut (savings; not MMF product) and Bunq and many other providers.

Poor to see no response yet again from all the Irish banks.
 
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I think the extra utility / satisfaction to the mortgage borrowers not having to pay more interest exceeds the loss of extra income to the depositors.

The mortgage borrowers are lucky that the savers of Ireland are generally unresponsive to interest rates.
 
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