AIB to Charge Negative Rates on €1m+ Next Year

L

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AIB have cut a series of deposit rates today effective January 2021.

AIB have also updated T&C's to allow AIB charge negative rates for BOTH personal customers and "micro-businesses". AIB already apply negative rates to corporate accounts.

According to Charlie Weston in the Indo, AIB will first apply negative rates to "wealth individuals" with deposits above 3 million EUR. This will be lowered to 1 million EUR next year.

"The bank is understood to be planning to lower the threshold to €1m for firms and wealthy individuals next year, which will impact thousands more depositors."

Big move but it was coming for some time.

EBS have imposed a cap on savings. No more than 500k.
Credit unions all have caps on savings.
Ulster Bank might be about to leave the market.

Can't be too long before KBC, BoI, PTSB, Revolut, Monese and N26 also apply negative rates to large deposits or caps.
 
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No urgent rush to switch yet.

In January 2021, the rate on most personal deposit accounts just goes to zero and AIB have the right from January, under the new T&C's, to charge negative rates but are not enacting this right straight away.

According to Charlie, AIB will first apply negative rates to deposits above 3 million and then 1 million but it is not clear from what as at date either threshold will apply other than it will happen "next year".

AIB should provide 60 days notice before they enact the negative rates.
 
Given 0% everywhere, and even negative rates on large deposits next year, State Savings are becoming even more attractive, relatively.

I'm guessing there must be huge inflows into 5 yr savings certs at 0.98% net?
 
Protocol said:
Given 0% everywhere, and even negative rates on large deposits next year, State Savings are becoming even more attractive, relatively.

I'm guessing there must be huge inflows into 5 yr savings certs at 0.98% net?
Click to expand...

In recent years, the NTMA I've had big inflows into State Savings. It's astonishing that the State Svings rates have not been cut for a long time.
 
State savings were a useful source of diversified funding to the state when private markets dried up in 2010-2012. I doubt they will every go negative.

Protocol said:
Given 0% everywhere, and even negative rates on large deposits next year, State Savings are becoming even more attractive, relatively.

I'm guessing there must be huge inflows into 5 yr savings certs at 0.98% net?
Click to expand...


In the first nine months of the year prize bonds plus savings products rose €700m to €18.5bn.
 
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