Press release
Minister McGrath welcomes State Savings interest rate increases
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Published on
Last updated on
The Minister for Finance Michael McGrath has today (1 September) welcomed the announcement by the National Treasury Management Agency (NTMA) of increases in the interest rates on State Savings products.
State Savings is the brand name used to describe the range of Irish Government savings products offered by the NTMA to personal savers. It offers Fixed-Term fixed-rate savings products, Prize Bonds and Deposit Accounts.
State Savings have no fees or transaction charges when lodgements and withdrawals are made and the State Savings Fixed Term Products are also tax free savings products.
When a person saves with State Savings they are placing money directly with the Irish Government. Repayment of all State Savings money is a direct, unconditional obligation of the Irish Government. Funds saved in State Savings Fixed Term products and Prize Bonds are placed in the Central Fund of the Exchequer and are used to fund government expenditure. They form part of the National Debt of Ireland.
During 2022 there were net inflows of €0.7 billion into State Savings products compared to €1.3 billion in 2021. The total value of State Savings holdings was €24.9 billion at end-July 2023 which includes Deposit accounts and forms over 10% of Gross Debt of Ireland.
Commenting on the rate increases, Minister McGrath said:
“It has been widely discussed that the interest rate environment has changed significantly over the last 12-18 months, and I welcome today’s announcement by the NTMA to increase rates. This will provide State Savings customers with an increased return on all new fixed-term savings and deposit accounts, along with an increased Prize Fund for Prize Bond holders from 1 October 2023, while also supporting the valuable conduit that State Savings provide for the Irish State to raise funding.
"State Savings digital development programme has improved accessibility options for savers, complementing the traditional service through the post office network. The launch of State Savings Online, a digital platform for customers, unique QR codes for purchases without an application form and the launch of Electronic Funds Transfer or EFT, instead of cheques for fixed-term customers, gives customers easier access to State Savings products.”
The rate increases to the suite of products detailed below are the second set of interest rate increases following the increases to the rates for longer term State Savings products which came into effect on Sunday, 26 March last. When setting interest rates, the NTMA is mindful of the balance between providing customers with an investment option and providing value to the Exchequer in terms of borrowing costs.
The increased fixed term rates will only apply to new issues of the specific products concerned so current holders will be unaffected.
Separately it is intended to close the current issue of the 4-year National Solidarity Bonds (€1.6 billion outstanding) and there will be no investment possible in this bond after 30 September 2023. This will not impact existing holders of the 4-year National Solidarity Bond. This bond has seen limited demand year to date and its closure should result in a more focused fixed rate tenor offering.
The fixed term interest rates which come into effect on the new issues from Sunday 1 October 2023 are as follows.
| Product | Fixed term years | Interest rate | Net AER1 |
| 3 Year Savings Bonds – Issue 18 | 3 | 4.00% | 1.32% |
| 5 Year Savings Certificates – Issue 25 | 5 | 9.00% | 1.74% |
| 6 year Instalment Savings – Issue 17 | 6 | 10.00% | 1.75%2 |
| 10 Year National Solidarity Bond – Issue 9 | 10 | 22.00% | 2.01% |
1 AER = annual equivalent rate. The AER assumes no early encashment.
2 AER on Instalment Savings assumes an average term of 5½ year (12 equal monthly lodgements followed by a 5 year term).
There is no new issue of the 4-year National Solidarity Bond.
The new variable interest rate, that comes into effect on 1 October 2023 for the Deposit Accounts is as follows.
| Product | Variable rate |
| Deposit Account | 0.75%3 |
3 Subject to Deposit Interest Retention Tax (DIRT) at the prevailing rate. Interest calculated daily and credited yearly on 31 December.
The new variable interest rate for the prize fund, from 1 October 2023 is as follows.
| Product | Variable rate |
| Prize fund rate | 1.00% |
Communication of these changes to customers will include details on the State Savings website, in Post Offices, on all Brochures/Application Forms, via Call Centre messaging notifications and in National Newspapers on 1 and 2 October.
The NTMA keeps interest rates for State Savings under review to ensure that products remain competitive in the savings market generally, whilst providing value to the Exchequer in terms of borrowing costs.
State Savings have no fees and that includes no transaction charges when someone lodges or withdraws their money. State Savings Fixed Term Products and Prize Bonds are also attractive tax free savings products.
The repayment of all State Savings money is a direct and unconditional obligation of the Government of Ireland. Funds saved in State Savings Fixed Term products and Prize Bonds are placed in the Central Fund of the Exchequer and are used to fund government expenditure. They form part of the National Debt of Ireland.
State Savings Online is the easy way for a saver to manage savings. It is possible to view and manage holdings across all State Savings Fixed Term, Prize Bonds and Instalment Savings products, initiate repayments to a nominated bank account (sole holdings) or reinvest funds to another State Savings product, including Prize Bonds. Customers may use a unique QR code to purchase State Savings products in the Post Office without having to complete a further application form.
The total value of State Savings holdings was €24.9 billion at end-July 2023.
For more information about State Savings go to the State Savings website.
The National Treasury Management Agency (NTMA) is a State body which operates with a commercial remit to provide asset and liability management services to Government. Businesses managed by the NTMA include borrowing for the Exchequer and management of the National Debt, the Ireland Strategic Investment Fund, the National Development Finance Agency, NewERA and the State Claims Agency.