PTSB Announce Interest Rate Increases

[Sarenco]

Does that not force their hands in the bond auctions

No.

Firstly, they wouldn’t have to pay 3% on a 3-year Cert to match PTSB, bearing in mind that there’s no DIRT on State savings products. If they offered, say, 2.5%, that would still be well below the current yield on 3-year government bonds.

Secondly, there are restrictions on the amount that can be invested in any particular State savings product, which effectively rules out institutional investors.

 

[joe sod]

No.

Firstly, they wouldn’t have to pay 3% on a 3-year Cert to match PTSB, bearing in mind that there’s no DIRT on State savings products. If they offered, say, 2.5%, that would still be well below the current yield on 3-year government bonds.

Secondly, there are restrictions on the amount that can be invested in any particular State savings product, which effectively rules out institutional investors.

Yes I am aware that they are different markets but I think it does contribute to the mood music around irish government bonds and what the markets determine their interest rates to be. The Irish government can get this amount of capital from regular savers at low interest rates. Therefore they don't need to pay higher interest rates for institutional money. I think it contributes to the sentiment around government bonds, because the bond markets know that the ntma can get the money cheaper from regular savers and that lowers the auction price. It's all about sentiment and that contributes to the sentiment

 

[faketales]

@faketales Correct that you can’t front load it, it’s monthly lodgements max €1,000 only. If you have a tranche of money to lodge there are far better options than this or any regular saver product My point is that for those that want a regular saver product this is a far better offering than that codswallop AIB are touting.

I find the attention regular saving get a bit unusual.

Given the caps, rate that you can get in, changing rate etc there not that much you can do to make them work for you.

I can understand from a banks perspective it keeps savers loyal as you can't easily transfer funds to a different banks regular saver even if savings are relatively modest.

 

[redstar]

Interesting that the regular saver and 21day notice regular saver are at the same interest rate. Why would anyone bother with the 21day account then?

 

[skrooge]

Interesting that the regular saver and 21day notice regular saver are at the same interest rate. Why would anyone bother with the 21day account then?

It wasn't always the case, pre-2016 the 21 day did attract a higher rate than the online regular saver.
The 21 day would might interest those people looking to save more than 1k a month (and didn't want to go to any of the better paying institutions).

 

[ClubMan]

Interesting that the regular saver and 21day notice regular saver are at the same interest rate. Why would anyone bother with the 21day account then?

Because you can probably put a lump sum into the latter while you are limited by the monthly drip feeding of the former?

Edit: oh - just noticed that this is basically what @skrooge has said above.

 

[Connard]

I find the attention regular saving get a bit unusual.

Given the caps, rate that you can get in, changing rate etc there not that much you can do to make them work for you.

I can understand from a banks perspective it keeps savers loyal as you can't easily transfer funds to a different banks regular saver even if savings are relatively modest.

Regular savers usually have higher rates than instant access demand accounts. You can't put a lump sum into them but they are good for people who are saving every month (even if those same people have a lump sum saved elsewhere any way). These rates are still decent compared to what we have access to. The only accounts that have similar rates are term deposit accounts with Raisin that require you to lock up your money. Advantia which is only for 6 months and then drops to a lower rate. Then there is TradeRepublic which is limited to 20k.

I do wish the news articles would highlight how rubbish the rates of their normal savings accounts are though.

 

[llgon]

The 21 day would might interest those people looking to save more than 1k a month (and didn't want to go to any of the better paying institutions)

The 21 day regular saver also has a limit of 1k a month but could be combined with the online regular saver to lodge 2k per month. (to clarify @ClubMan 's reply)

 

[llgon]

Given the caps, rate that you can get in, changing rate etc there not that much you can do to make them work for you.

My wife and I each have a 21 day regular saver account with PTSB since 2010 and an online regular saver since 2014. That's how you can make them work for you.

 

[Marsupial]

The only thing that needs to be watched is that the balance, including interest payments, must never exceed €50k.

Credit to PTSB!

We accidently went over the €50K balance on our regular saver account in early July. Three days later we received a letter from PTSB advising us that the interest on the extra €1,000 that we had lodged would be paid at 0.1% per annum. I was impressed by that rapid alert.

 

[podgerodge]

Minister for Further Education Simon Harris welcomed some banks having “finally decided to give some people a fair share of their own money”, but said the Irish lenders have been laggards in passing on deposit rate increases.

“Don’t expect me to say thank you on behalf of the people that I represent. They got away with it for a long time,” Mr Harris said.




And not a word about the likes of Prize Bond rates being uncompetitive.

 

[Lightning]

My thoughts:
- No increase in rates for current account holders where most deposits are held.
- No increase in rates for on-demand account holders which are the second most popular account type.
- No increase in rates for lump sum notice account holders.
- Decent increase in regular saver rates. 2.5% is a reasonable return. And there are less gotchas with the PTSB regular saver products than AIB and BoI and EBS. One can save 3k EUR per month @ 2.50% via depositing 1K into an Online Regular Saver and 1k into 1 21 Day Notice Regular Saver and 1k into a second 21 Day Regular Saver.
- Slight improvement in term deposit rates. But PTSB's comments that they offer "the highest in the market for a period of this length" for 3 years is misleading and completely ignorant of the foreign competition in the market such as Raisin.

Good news that rates have increased but most depositors will not benefit unless they are smart enough to maximise the regular saver return.

Next step: AIB and NTMA will surely act.

 

[skrooge]

But PTSB's comments that they offer "the highest in the market for a period of this length" for 3 years is misleading and completely ignorant of the foreign competition in the market such as Raisin.

However bad it is to see a bank misrepresenting the situation I find the fact a state agency like the CCPC does the same much worse.

Compare lump sum deposit accounts - ccpc.ie consumers

If you are thinking of saving for a rainy day or simply building up a nest egg take a look at our tools to compare lump sum deposit accounts.

www.ccpc.ie

You won't find any mention of Raisin or their affiliates on the site. I'm curious as to their rationale for having such a blinkered view of the deposit market.

I feel their claim to provide "Impartial and comprehensive information to help you make the best financial decisions for your needs." A little wide of the mark.

 

[Lightning]

However bad it is to see a bank misrepresenting the situation I find the fact a state agency like the CCPC does the same much worse.

Compare lump sum deposit accounts - ccpc.ie consumers

If you are thinking of saving for a rainy day or simply building up a nest egg take a look at our tools to compare lump sum deposit accounts.

www.ccpc.ie

You won't find any mention of Raisin or their affiliates on the site. I'm curious as to their rationale for having such a blinkered view of the deposit market.

I feel their claim to provide "Impartial and comprehensive information to help you make the best financial decisions for your needs." A little wide of the mark.

Both the CCPC and Bonkers have a blinkered view of the deposit market and have no doubt mislead huge numbers of people with their highly selective comparisons which fool people into thinking it is the whole market.

Both should expand their listings or provide clear disclaimers that their comparisons don't represent the whole deposit market.

 

[BrokeBroker]

PTSB’s Regular Saver product is now by far the best in the market, and is far superior to AIB‘s garbage offering. It pays the premium rate of 2.5% on a much higher balance, and more importantly goes on paying this premium rate indefinitely. None of that AIB 12 month reset to zero caper. The only thing that needs to be watched is that the balance, including interest payments, must never exceed €50k.

Is it possible to have a regular saver account with pTSB, without having a current account with them?

I don't particularly wish to have a second current account (and fees) to avail of their regular-saver.

 

[podgerodge]

Very poor article by Charlie Weston in the Indo today, pretty much an advert for PTSB, no mention of on demand deposits and refers to "a string of increases at PTSB".

Similar article in the Irish Times from Joe Brennan. No deep dive.

 

[FCBC12]

In a way, the pillar banks here (AIB, BOI, PTSB) are being unfairly criticised for not increasing deposit rates quickly enough.

They are in the business of making money, and not a charity. With so much household deposits still sitting in current accounts (€63B in AIB alone as of Jun), they can manage without having to pay higher deposit rates. As a shareholder, if they did otherwise, you would be asking serious questions as to why they incurred this avoidable cost.

Staying on the theme of AIB as an example, some of their critics fail to mention that the standard 5 year green fixed rate is now the same as the ECB rate (3.75%), and had they raised rates in line with the ECB, that 5 year rate would instead be 6.40%. So it seems to me that the banks are in fact protecting (albeit likely not their intention) the more vulnerable people in society (mortgage holders) as opposed to the more fortunate who have savings on deposit.

The €63B on current deposit at end of June was down 0.9% on Dec 2022, the first 6-month drop since Jun 2011!

Note: I'm a very small AIB shareholder so may be biased towards an investors point of view.

 

[Marsupial]

Very poor article by Charlie Weston in the Indo today, pretty much an advert for PTSB, no mention of on demand deposits and refers to "a string of increases at PTSB".

Similar article in the Irish Times from Joe Brennan. No deep dive.

Two rehashes of the same press release?