NTMA increases rates for State Savings products

  • Rates on new fixed term products to increase. The total tax free return on the new fixed rate products are as follows:
    • 3-Year Savings Bond from 1.0% to 4.0%
    • 5-Year Savings Certificate from 5.0% to 9.0%
    • 6-Year Instalment Savings from 5.5% to 10%
    • 10-Year National Solidarity Bond from 16% to 22%
  • Variable rate on the Deposit account to increase from 0.05% to 0.75%
  • For Prize Bonds, the prize fund will almost treble in size to c. €48m, with the variable rate on the prize fund increasing from 0.35% to 1.00%.

1 September 2023 - The National Treasury Management Agency (NTMA) is increasing the rates that apply to new fixed term and variable rate State Savings products and almost trebling the Prize Bond fund on offer to holders of Prize Bonds.

All new interest rate changes and new Prize Bond fund structure will be effective from the 1st October 2023.

Fixed term product changes

The change in the tax free total return and Annual Equivalent Rate (AER) for new fixed term products taken out on or after 1st October are:

  • 3-Year Savings Bond from 1.0% to 4.0% (AER from 0.33% to 1.32%).
  • 5-Year Savings Certificate from 5.0% to 9.0% (AER from 0.98% to 1.74%).
  • 6-Year Instalment Savings from 5.5% to 10% (AER from 0.98% to 1.75%*).
  • 10-Year National Solidarity Bond from 16% to 22% (AER from 1.50% to 2.01%).

Deposit account rate changes

The variable rate that applies to the Deposit account will increase from 0.05% to 0.75% from 1st October. Deposit Interest Retention Tax (DIRT) applies to interest on these deposits.

Prize Bond changes

The variable rate used to calculate the total prize fund is increasing from 0.35% to 1.00% of the total value of Prize Bonds outstanding, effective from 1st October. The prize fund is almost trebling in size and prizes are tax free.

The increased prize fund will mean the new prize structure from the 1st October is as follows:

  • A top monthly prize of €500,000, in the last weekly draw of every calendar month, versus the previous top monthly prize of €250,000, in the last weekly draw of every calendar quarter.
  • A top weekly prize of €50,000 in every weekly draw.
  • Each week there will be 20 prizes of €1,000 and 20 prizes of €500 respectively, compared to 10 prizes of €1,000 and 10 prizes of €500 currently.
  • The remaining weekly prize fund will be awarded in €75 prizes, which is an increase in the previous minimum prize of €50.
  • Overall, the number of prizes is expected to double to half a million per annum.

Dave McEvoy, NTMA Director of Funding and Debt Management, said:

“In setting interest rates on State Savings, the NTMA seeks a balance between providing customers with a savings option and providing long-term value to the Exchequer in terms of managing the cost of borrowing.

Rates are subject to ongoing review and take account of a number of factors, which include the wider interest rate environment, the strength of the State’s fiscal and funding position, and competitive developments in the retail savings market.”

Other information

All previous issues of Savings Bonds, Savings Certificates, Instalment Savings, and the 10 Year National Solidarity Bond will close on 30th September 2023. New issues of these fixed rate products will come into effect from 1st October. The 4-Year National Solidarity Bond will cease with effect on 30th September 2023 and there will be no new issue.

The new fixed term rates will have no effect on existing product holders. Money which has already been placed in previous issues of these products before 1st October 2023 will continue to receive the fixed rates applicable when the product was purchased, for the remaining term.

The total value of State Savings holdings was €24.9 billion at end-July 2023.

*AER on Instalment Savings assumes an average term of 5½ year (12 equal monthly lodgements followed by a 5 year term)

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