PTSB launches new deposit product that pays interest upfront

Most of time if you want to get the best return for your money it means locking it away for a certain period. Two or three years perhaps. And it also means having to wait until the end of the fixed term before you can get your hands on any interest that you're due, which for some people doesn't feel like a very good deal.

But now PTSB has come out with a novel deposit product called Interest First which allows customers to get their hands on their interest at the very start of the fixed term...   

PTSB Interest First Deposit Account 

The new Interest First deposit product from PTSB offers a fixed interest rate of 2.75% over one year and PTSB says it will pay out all the interest due within 30 days, meaning you don’t need to wait until the end of the fixed period to get your interest.  

You can then even earn interest on your interest by reinvesting the money in another savings account if you wish. Or you can simply use it to put towards a nice holiday of course!

This is the only product of its kind in the Irish market right now although PTSB itself offered a similar product up until 2021 and has reintroduced it due to popular demand.  

There's no maximum limit to the amount of money you can put on deposit but you need a minimum amount of €5,000. And all funds up to €100,000 are protected under the deposit guarantee scheme. 

Early withdrawals from the account aren’t allowed. In the event you do need access to your money before the end of the fixed term, an early withdrawal charge will apply and any interest that was paid to you upfront will be deducted from your account balance, and your account will close.

The news comes as latest figures show that Irish households now have a record €156 billion resting on deposit. However the majority of the money is still in accounts that pay little to no interest. 

Some 89% of savings in Ireland are still held in so-called demand deposit accounts or current accounts which pay on average just 0.13% in interest. This compares with an average of 54% across the Eurozone. This is despite rates of up to 3% and above being on offer to those who are prepared to put their money into a fixed deposit account.  

Our Interest First deposit product is the only of its kind in the Irish market and provides our customers with an innovative way to get access to their interest, without having to wait until the end of their fixed rate term. We’re delighted that we’re able to expand on our already competitive suite of savings and deposit options and bring additional choice to both existing and new customers.

Eddie Kearney, PTSB’s Head of Retail Distribution 

Increasing competition 

Last month the European Central Bank (ECB) cut interest rates by 0.25 percentage points - its first cut in two years. And it’s expected to cut rates by a similar amount in September. And perhaps for a third time before the end of the year. 

This was expected to lead to downward pressure on savings and deposit rates.

However increasing competition for savers’ money in Ireland from the likes of N26, Revolut, Bunq and Raisin has meant that the rates on offer haven’t moved - indeed they’re even increasing. 

For example, Bank of Ireland recently increased the rate on two of its fixed-term deposit accounts. Its two-year fixed-term Advantage account now offers 3% a year. 

And in recent weeks N26 and Revolut have launched new instant-access savings accounts which have no doubt put pressure on the main Irish banks to improve their offerings.

Revolut now offers 2% for customers with a standard account and up to 3.49% for those with an Ultra subscription. And N26 offers 2.80% for customers with a standard account and up to 4% for those with a top-tier Metal subscription.

With both banks your savings are also protected up to €100,000 under the deposit guarantee scheme. And there’s no minimum deposit amount or any set-up fees. And you can access your money or top up your savings whenever you like quickly and easily within the banks' slick mobile apps. 

Review all your options 

You can easily find the best return for your money on bonkers.ie. 

Use our savings comparison tool to compare rates from the likes of AIB, Bank of Ireland, PTSB, Trade Republic, Raisin, Bunq, N26 and more in just minutes. 

Or check out our in-depth article on some alternative savings options for your money.