The changes come in advance of expected rate cuts from the ECB over the coming months which are likely to result in lower savings rates.
There's both good news and bad news for savers today as PTSB has announced a number of changes to its fixed deposit rates.
First the good news!
PTSB is increasing the interest rate on its one-year fixed-rate account by 0.75 percentage points to 2.75%. And it's also hiking the rate on its six-month account by 0.25 percentage points to 2%.
The new rates are designed to attract savers who may not want to lock their money away for overly long periods.
However the bank's three-year fixed rate will fall from 3% to 2.10%. This means the best rate on offer from PTSB will now be 2.75%, down from 3% previously.
For the moment there is no change to PTSB's 18-month and five-year fixed rates.
Here's a look at PTSB's new deposit rates which will come into effect from 14th May.
| Fixed-rate product | New rate | Previous rate | Change |
| 6-month | 2.00% | 1.75% | +0.25% |
| 1-year | 2.75% | 2.00% | +0.75% |
| 18-month | 2.50% | 2.50% | n/a |
| 3-year | 2.10% | 3.00% | -0.90% |
| 5-year | 2.00% | 2.00% | n/a |
Where to for savings rates?
In recent months there’s been huge focus on when and by how much the European Central Bank (ECB) will cut interest rates and the impact this will have on mortgage rates.
At the moment it's highly likely the ECB will cut rates by 0.25 percentage points in June and at least once more again before the end of the year.
But what many people tend to forget is that this is also going to lead to lower savings rates eventually.
So today’s news that PTSB is cutting one of its best fixed deposit rates from 3% to 2.10% isn’t overly surprising. But it should serve as a warning to savers that the higher rates of interest that have been available over the past 18 months or so won't be around forever.
At the moment rates of up to 3% are still on offer from AIB and Bank of Ireland. And higher rates of up to 4% are on offer from the likes of Trade Republic and Raisin. Bunq also has good options for savers while N26 recently launched an instant access savings account offering up to 4% interest.
Irish savers are collectively missing out on BILLIONS of euro in interest a year by not putting their money into the best yielding savings accounts. Instead they're leaving it in accounts that pay little to no interest. And this apathy is also helping the banks make record profits.
But with the ECB expected to start cutting interest rates from next month, now really is the time to do something with your money before savings rates start to fall.
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