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Compare Savings Accounts
How to compare the interest rates, features and fees on a range of savings accounts in Ireland to find the right one for you.
Savings accounts can be a great way to make your money work harder than it otherwise would in a standard current account. So, it’s easy to see why around half of Irish adults have a savings account.
Read on to find out what you need to know about comparing savings accounts in Ireland.
What is a savings account and how does it work?
A savings account is a bank or building society account that pays interest on your balance. You deposit money into the savings account and in return, the bank or building society pays you interest. Interest rates will vary, and some accounts will have stipulations such as having to pay in a certain amount each month.
What types of savings accounts are available?
There are different types of savings accounts to suit people with a wide range of savings goals. Here are some of the most popular types of savings accounts in Ireland:
- Regular savings account. Allows you to save on a regular basis.
- Fixed interest savings account. The rate of interest you earn on any savings you deposit into this account will remain the same, for a set period of time, or “fixed term”. You may have restricted access to your overall savings but you won’t have any surprises about how much interest you’ll earn.
- Variable interest savings account. The rate of interest you earn on any savings you deposit can increase or decrease. This means you can benefit from interest rates rising but could stand to lose savings if the rates fall. While any rate changes will ultimately be the bank’s decision, they are usually linked to the European Central Bank’s (ECB) rate.
- Notice savings account. With a notice savings account, you’ll need to give notice, usually a set amount of time, before being able to access your savings.
- Demand/instant access savings account. This account allows you to access your savings without having to give any notice.
- Children’s savings account. An account that allows you to save for your child(ren)’s future.
It’s worth noting that each savings account will have its own terms and conditions as well as specific features. Some may limit the amount you can save overall while others may let you deposit an unlimited amount of savings into the account.
What is a minimum initial deposit?
When opening a savings account, a bank or building society may require you to make a minimum initial deposit. For example, this could be as little as €10 or as great as €10,000 or more. You will need to have at least this amount (or more) in order to open your new savings account. If you don’t have the minimum amount, you will not meet the minimum initial deport requirements and will therefore be unable to open the savings account.
What are withdrawal limits?
Each bank and building society will have its own rules for its savings accounts. Some may require a minimum initial deposit, as we explained above, or some may not allow you access to your funds until the fixed term matures. If however, a bank or building society does allow you to access your money, it may set a limit as to how much you can withdraw each time. Or it may set a limit on the number of withdrawals you can make throughout the lifetime of the savings account. If you find yourself needing to exceed the bank or building society’s withdrawal limits, you may be charged a fee for the privilege.
Why do some savings accounts offer introductory interest and bonus rates?
An introductory interest rate is an incentive to open that specific account instead of choosing an account from another bank or building society. These offers are typically for new customers only, which means you can’t apply for the same account again and again and expect to get the introductory interest rate.
Similarly, a provider may reward you with bonus fixed interest rate (for a limited time) for letting it borrow your money to loan to others while it sits in the bank or building society. However, you may be limited in how often you can access funds so this would only be a good option if you don’t think you’ll require access to your savings.
Should I open a savings account?
It’s good to save for the future but everyone is different. Consider your own financial situation to decide whether a savings account will help you with your own savings goals. We’ve put together some of the benefits and drawbacks to savings accounts to help you decide:
Benefits of savings accounts
- Savings accounts are a safe investment and are covered under the Government’s Deposit Guarantee Scheme. This protects eligible deposits up to €100,000 per person, per institution.
- They can be a great tool to help you save and budget.
- Savings accounts are liquid. It’s harder to withdraw your money from a term deposit or share trading account (when it’s invested in shares).
- You can potentially earn a higher interest rate than your everyday current account
- You can use them to save up for a range of short and long term goals such as a house deposit, family holiday or a new car.
- Your savings can grow if interest rates increase
Drawbacks of savings accounts
- You may need to deposit a set amount each month.
- You may not be able to make any withdrawals in order to receive interest on your balance.
- You might not be able to easily access your savings, with some accounts requiring minimum notice in order for you to withdraw your funds.
- Interest rates for savings accounts can periodically go quite low, as the official cash rate falls.
- Your savings can fall if interest rates decrease.
How do I compare savings accounts?
There are certain features to keep in mind when comparing savings accounts, including fees, interest rates and your personal savings goals. Read below to find out how these factors can help you compare savings accounts and choose the right one for your needs.
Look for an account with low (or very low) monthly, annual, and transaction fees. The idea is to build wealth (not pay the bank or building society to store your money!).
High or competitive interest rates
Getting the highest interest rate means your money can work harder for you. You’ll want to check the conditions involved in receiving any introductory rate. This rate might only last the first few months so be sure to check the standard rate that your account will revert to after this period ends.
Savings goals (short-term vs long-term)
You may want a different type of savings account depending on your savings goals. If, for example, you are saving to buy something in the short term (a few months or a year away), a notice or regular savings account may suit best as these will let you save each month and access your funds providing you give notice. If you are saving for a special event well into the future (5 years or more away), you might benefit from an account with a fixed interest rate or a fixed term. You may have restricted access to your savings but the interest rate won’t change throughout the lifetime of your savings account and will be locked in.
Some savings accounts allow you to withdraw money a few times each month, while some require you make no withdrawals at all. If you anticipate needing regular access to your savings, you won’t want an account that will charge you for doing so. However, being charged for accessing your account is also a great incentive for not touching your money and letting it grow. Compared to fixed term deposits, instant access savings accounts offer relatively easy access to your money.
If you can you make regular deposits each month, a regular savings account can help you amass a pot of cash over time. Alternatively, if you have an initial lump sum, you may want to lock in the interest rate you earn for a fixed period of time.
How do I compare interest rates on savings accounts?
To encourage account holders to save, banks and building societies will award you an interest rate in exchange for using your money to give out loans. The interest rate on your savings account can be fixed or variable but linked to the European Central Bank’s (ECB) rate; if the interest rates on all savings accounts are low, it usually means the ECB’s cash rate is low. However, the rate you’re offered is up to the discretion of the bank or building society.
In some cases, the interest on your account is calculated daily and paid monthly. This means you’ll get compound interest so you earn interest on your interest. You have to read the fine print to see if your account pays interest monthly to be sure you will get compound interest. Interest that is paid annually isn’t compounded as often and thus won’t be as lucrative for you.
When comparing interest rates, it’s important to pay attention to the requirements set in order to achieve the best interest rate – this may mean having to deposit a certain amount of money in the account each month and limits to the number of withdrawals you can make. You may not want to just opt for the account with the highest interest rate, because you might not be able to meet the deposit conditions to get that rate.
Some savings accounts might also offer a high introductory interest rate, fixed for a period of time, which is likely to be higher than the standard variable rate.
Not all savings accounts are created equally so it’s important that you check the features of one against your own financial circumstance.
How do I open a savings account?
- Find a savings account that meets your needs.
- Visit a branch and complete your application. You’ll need certain identification documents with proof of your residential address including your passport and/or driver’s licence so have those handy.
- Transfer the minimum initial deposit into your new account if applicable.
- Set up an automatic transfer of the minimum monthly deposit required to achieve the best interest rate if applicable.
- Start earning interest and putting your savings to work!
Can I apply for a savings account online?
In some instances, you will be able to apply online but this depends on the bank or building society. The process typically involves filling in an online application, verifying your identity and depositing funds into the account to get your savings plan started. Documents such as a passport, birth certificate or driver’s licence may need to be uploaded as part of the application and verification process.
While many accounts today are opened and managed online, others may require you to go into a branch or apply for the account via post.
How do I withdraw money from my savings account?
Savings accounts usually don’t come with a debit card like everyday current accounts.
To access the funds in the savings account, you may need to request a withdrawal with your bank or building society and provide the account details of where you want the funds transferred to. Depending on the savings account you choose, there may be stipulations as to how often you can withdraw funds from the account. Savings accounts offering fixed interest rates may not allow you to touch your money for extended periods of time, or may charge you for doing so.
If you know you want to lock away your funds for a longer period, you may want to consider a fixed term account instead of a regular savings account.
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