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NTMA announces new issues of State Savings products and changes to interest rates

8 December  2013 –  The National Treasury Management Agency (NTMA) has today announced (180 KB, PDF format):

1. new issues of its range of fixed rate State Savings™ products and 
2. a new variable interest rate used to calculate the prize fund for Prize Bonds.

FIXED RATE PRODUCTS

  • 3-year Savings Bond (Issue 15)  offering a 4% fixed-rate total return (AER1 1.32%)
  • 4-year National Solidarity Bond2 (Issue 4) offering an  6% fixed-rate total return (AER 1.47%)
  • 5½ -year Savings Certificate (Issue 20) offering an 10% fixed-rate total return (AER 1.75%)
  • 6-year Instalment Savings (Issue 12) offering a 10% fixed-rate total return (AER 1.75%3)
  • 10-year National Solidarity Bond2 (Issue 4) offering a 30% fixed-rate total return (AER 2.66%)

Note 1: AER is the Annual Equivalent Rate. The AER quoted assumes no early encashment.
Note 2: National Solidarity Bond Issue 4 no longer pays annual interest of 1% (unlike Issue 1,2 & 3). 
Under Issue 4 the bonus is paid on maturity after 4 or 10 years (same payment structure as the 3-year Savings Bond).
Note 3: The AER on Instalment Savings assumes an average term of 5½ years (12 equal monthly lodgements followed by a 5-year term).

The existing issues of these products are now closed to new purchases.

The rate reductions will only affect new purchases that take place from today (Sunday 8 December 2013).  They have no effect on the existing holders of Savings Bonds, Savings Certificates, Instalment Savings or National Solidarity Bonds, as those interest rates have already been fixed for the duration of their term.

Any money already placed in previous issues of these products prior to 8 December 2013 will continue to receive, for their remaining term, the fixed rates applicable to each product on the day that it was purchased.

VARIABLE RATE PRODUCTS

The rate used to calculate the monthly Prize Bond prize fund in January 2014 (and until further notice) will be 1.60%.The top prize structure is unchanged and there will continue to be a €1 million prize in the last weekly draw of each second month, viz. February, April, June, August, October and December. The number of weekly €100 prizes is being reduced from 500 to 250 prizes commencing January 2014. Based on the current number of Prize Bonds, the new 1.60% rate will generate almost 8,500 weekly €50 prizes.

There are no changes to the variable rate on the Ordinary Deposit Account which continues to pay a rate of 0.25% subject to DIRT or to the 30 day notice Deposit Account Plus which continues to pay a rate of 0.50% subject to DIRT.

Speaking today an NTMA spokesman said: “The new rates reflect the reductions in interest rates in the savings market and in Sovereign bond yields generally.”

Link to NTMA State Savings brochures

Editor’s Note:

At any time, the NTMA may amend the fixed or variable interest rates and the number and value of Prize Bond prizes. Prior to the introduction of any such changes, a notice is placed in the national newspapers and full details are available on www.StateSavings.ie. All State Savings™ money is placed directly with the Government and the repayment is a direct unconditional obligation of the Government.