State Savings Rates Increase For First Time in 16 Years

It's a pretty difficult product to increase rate on substantially at one time; if rate increase was larger, one could cash out existing savings and reinvest at higher rate. There's no break fee, apart from the forfeited interest.
 
NTMA announcement here:

https://www.ntma.ie/news/ntma-annou...ings-products-and-changes-to-interest-rates-5

Product/Rate details here:

Ireland State Savings - State Savings Products | State Savings

State Savings products include Fixed Term Products, Regular Savings Products, Deposit Accounts and Prize Bonds
www.statesavings.ie www.statesavings.ie

In summary:

5 year Savings Certificates increase from 3% to 5%​
10 year National Solidarity Bond from 10% to 16%​
6 year Instalment Savings from 3.5% to 5.5%​

The following remain unchanged:

3 year Savings Bond at 1%​
4 year National Solidarity Bond at 2%​
Prize Bonds at .35%​
 
The last10 year one i took out was 16%, and stopped, when it was reduced to 10 %. Prior to that i had investments at 45 %, 35 % & 25 %.

There is a place, albeit limited, for a portion, of overall investment, in these, as no DIRT or charges, guaranteed, zero risk, and quickly and easily accesible, since they added the online account, about 2 years ago, so you can request online- payment to your bank account, with no form filling.

I would not expect a further increase this year.
 
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The government bond market is demanding 30 percent nominal return for placing money with the Irish government for 10 years. These products are offering Joe Soap 16 percent over 10 years. Take what you will from that.
 
camlin90 said:
The government bond market is demanding 30 percent nominal return for placing money with the Irish government for 10 years. These products are offering Joe Soap 16 percent over 10 years. Take what you will from that.
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That's why they now increasing it because the bond markets are going to be demanding even higher interest rates from government bonds in the light of the banking crisis lately .Will be interesting to see the interest rates when the ntma next looks to raise more money from selling bonds
 
ClubMan said:
To cite it as a "return" is completely misleading.
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An Post describe it as: "Prize Fund rate currently 0.35%" which is not misleading.

Otherwise is indeed an expected return due to the fact that (via central limit theorem) if you hold enough prize bonds and wait long enough you will get 0.35% p/a on your capital invested.
 
NoRegretsCoyote said:
An Post describe it as: "Prize Fund rate currently 0.35%" which is not misleading.

Otherwise is indeed an expected return due to the fact that (via central limit theorem) if you hold enough prize bonds and wait long enough you will get 0.35% p/a on your capital invested.
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The attached spreadsheet gives the statistical distribution of the annual prizes you may expect for your input number of bonds. The greater the number of bonds the narrower the range of outcomes by the law of large numbers or indeed the CLT.
All the same it is disappointing that the rate has not been increased. I think the rate on the UK's Premium Bonds is 2.1%.
 

Attachments

  • Prize Bonds.xlsx
    15.7 KB · Views: 145
RedOnion said:
No, they're not. The "banking crisis" has reduced yields on 'safe' bonds.
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Probably a temporary phenomenon to put money somewhere, I bet irish government bond interest rates will be higher unless the ECB is forced to change tact on interest rates.
I remember the close to 0% bonds the ntma issued in 2020 and 2021, they were also ultra safe but now are under water due to the big interest rate rises since. They were not wise investments, the same with all government bonds issued in 2020 they are all now under water, some big time
 
joe sod said:
I remember the close to 0% bonds the ntma issued in 2020 and 2021, they were also ultra safe but now are under water due to the big interest rate rises since. They were not wise investments, the same with all government bonds issued in 2020 they are all now under water, some big time
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Absolutely NOTHING to do with the recent "banking crisis".
They are underwater because interest rates gave increased. This is how fixed rate bonds behave.
 
ClubMan said:
Very few people are going to get that.
A tiny few will get a lot more.
To cite it as a "return" is completely misleading.
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Yes indeed very few will get 0.35%. But 0.25% of that is paid out in €50 prizes. See my spreadsheet attached to an earlier post.
Roughly speaking half of Prize Bond holders will get more than 0.25% and half will get less than 0.25%. For a couple with the max €500k holding the chances of them getting less than 0.2% are about 1 in 5.
Tax Free it has been the best "deposit" in town for a while but it is now not quite so competitive.
 
The ten year bond, while you could definitely do better elsewhere, could be a useful product for someone looking to retire early. Say you are 50 now, and want to retire at 60. You could buy 10k each year for the next seven years, and they would mature each year from 60 -67, bridging that gap with an annual income until the state pension kicks in. Obviously more ways to skin a cat, and probably better ways, but that would be very simple and risk free way to do it.
 
Rasputin said:
The ten year bond, while you could definitely do better elsewhere, could be a useful product for someone looking to retire early. Say you are 50 now, and want to retire at 60. You could buy 10k each year for the next seven years, and they would mature each year from 60 -67, bridging that gap with an annual income until the state pension kicks in. Obviously more ways to skin a cat, and probably better ways, but that would be very simple and risk free way to do it.
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What “better elsewhere” options are there ?, that are guaranteed, Risk free, DIRT free, charges free, and easily accesible.

The context here, is really, looking at overall retirement Pension pot/savings, pension is 100% equity, have been maxing for years, so can’t put any more in, but have also accumalating state savings, over last 15 years, so the state savings part are about 10% of overall retirement pot.
 
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fayf said:
What “better elsewhere” options are there ?, that are guaranteed, Risk free, DIRT free, charges free, and easily accesible.
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Well, there are deposits out there that would pay more, after DIRT, for shorter periods, which would be 'guaranteed' up to 100k. Some have easy access, others don't. Better in the sense that we have no idea where interest rates will be in 4 or 5 years time, so rolling it in shorter term deposits might get you back a lot more over 10 years. I was actually making a small point in favor of the 10 year bond, and everyone's situation is different.
 
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