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

2 June 2013 –  The National Treasury Management Agency (NTMA) :

1. new issues of its range of fixed rate State Savings™ products
2. and changes to the interest rates on its variable rate products.

FIXED RATE PRODUCTS
  • 3-year Savings Bond (Issue 14)  offering a 4% fixed-rate total return (AER1 1.32%)
  • 4-year National Solidarity Bond2 (Issue 3) offering an  8% fixed-rate total return (AER 1.94%)
  • 5-year Savings Certificate (Issue 19) offering an 11% fixed-rate total return (AER 2.11%)
  • 6-year Instalment Savings (Issue 11) offering a 14% fixed-rate total return (AER 2.41%3)
  • 10-year National Solidarity Bond2 (Issue 3) offering a 35% fixed-rate total return (AER 3.05%)

Note 1: AER is the Annual Equivalent Rate. The AER quoted assumes no early encashment.
Note 2: The annual interest payments on the National Solidarity Bonds are subject to DIRT at the prevailing rate (currently 33%).
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 interest rates on these new issues represents a reduction of between 0.49% and 0.96% on the AER that was available on the previous issue of these products.

The rate reductions will only affect new purchases that take place after today (Sunday 2 June 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 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

There are also changes to the variable rate products which will have an immediate effect on all existing holders of Prize Bonds and the 30 day notice Deposit Account Plus.

Prize Bonds prize fund rate is now 1.75% – with effect from Sunday 2 June 2013 the variable rate of interest used to determine the value of the monthly prize fund is 1.75%. The top prize structure is also changing. Previously there was a €1 million prize each month, but now, with immediate effect, there will be a €1 million prize in the last weekly draw of each second month, viz. February, April, June, August, October and December.

30 day notice Deposit Account Plus now pays 0.50% AER – with effect from Sunday 2 June 2013, the NTMA has announced a change to the variable interest rate on the 30 day notice Deposit Account Plus which will now pay a variable rate of 0.50% AER subject to the prevailing rate of Deposit Interest Retention Tax (DIRT) (currently 33%).

There is no change to the Ordinary Deposit Account which pays a rate of 0.25% AER 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

Editors 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.