Alan Dillon (Mayo, Fine Gael)
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497. To ask the Minister for Finance the reason Irish deposit rates are among the lowest in Europe; the way he plans to support the Irish saver environment and help regular savings accounts in Ireland that are at risk of losing the value of their money over time due to inflation; and if he will make a statement on the matter. [19152/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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The European Central Bank Governing Council sets its key policy rates with a view to achieving price stability. Monetary policy rates are currently low to ensure that financing conditions remain favourable for households, firms and governments and to support the economy through the pandemic.

This is a commercial matter for individual Irish banks to set their own deposit rates, having regard to commercial considerations when operating. The factors affecting the decisions of banks when setting their own deposit rates are manifold and can include the costs of offering deposit products.

I am advised that average new business interest rates on household deposits in Ireland (0.03% in February 2021) are below the euro area average rate (0.12%), but are close to the median rate across the 19 euro area countries (which is also 0.03%). Moreover, the current low inflation environment means that real deposit interest rates (nominal interest rates less the rate of inflation), are not exceptionally low in Ireland as compared to the rest of the euro area (in February 2021, inflation in Ireland was at -0.4%, which is lower than in the rest of the euro area at 0.9%).