• According to the Central Bank of Ireland there is approx. €140 billion of retail overnight or demand deposits and as of May 2023 the deposit rates range between a paltry 0.04% to 0.28%  https://www.centralbank.ie/statistics/data-and-analysis/credit-and-banking-statistics/retail-interest-rates
  • In addition there are an additional €63 billion of company deposits on notice earning a paltry 0.08%
  • According to the Financial Times in July 2023  Irish banks are the worst in the Euro Zone for passing on rate increase to their deposit customers https://www.ft.com/content/1d2949d6-00d1-4c18-af81-01439fa7cfc5
  • With a near complete lack of competition in Irish banking, this means that Irish depositors are losing out on approx. €4billion per annum
  • In the UK the Financial Conduct Authority is reviewing banks who are not passing on rate increases and getting them to justify their lack of action and warns that these banks will face robust scrutiny https://www.fca.org.uk/news/press-releases/action-plan-cash-savings
  • There are to date no indications that the Central Bank of Ireland will take any action to force the Irish banks to offer more competitive deposit rates. Irish banks are very likley to continue to extract maximum advantage from their sticky deposit customers
  • Irish depositors can use small banks such as Raisin bank who do at least pay competitive rates and are covered by Deposit Guarantee schemes. However, understandably many people are reluctant to place funds with unfamiliar banks even if they are covered by Deposit Guarantee schemes. People are certainly not comfortable placing amounts in excess of €100k with these smaller and relatively unknown banks
  • There is however an attractive alternative for depositors and this has been widely been used for many years by US individuals and companies. This alternative is Money Market funds which offer much more competitive rates compared to Banks. These Money Market Funds saw very large inflows in 2023 https://www.investopedia.com/money-market-fund-assets-under-management-hit-record-5-1-trillion-7371120
  • Impartial can offer Money Market Funds in Euro, Sterling and US Dollar
  • They are suitable for individual depositors, corporates, ARF holders, self-administered pensions and charities
  • The Money Market Funds come with the security of a AAA rating, but they are not covered by the €100k Deposit Guarantee scheme
  • There is full liquidity so you can get your funds back with one day’s notice
  • The rates of return will track the ECB as rates increase, and current returns for Euros are just under 3% after all management costs. For Sterling the equivalent returns figure is 4.1% and 4.75% for US Dollars
  • Gains for individuals are taxed under Exit tax at 41% and for companies Corporation Tax at 25% applies.
  • There are no entry charges or costs
  • Impartial has prepared a detailed briefing note for your convenience, and will offer consultations at our own expense to allow you to review and make an informed decision as to the merits and attractiveness of Money Market Funds as an alternative to bank deposits
  • For more information please either email us on info@impartial.ie  or click here to leave to your details and we will be in contact to arrange a suitable time for a discussion.