Jim O'Callaghan (Dublin Bay South, Fianna Fail)
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104. To ask the Minister for Finance his views on the failure of banks to increase interest rates for deposit holders. [21229/23]

Michael McGrath (Cork South Central, Fianna Fail)
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Deposit interest rates are a means for banks to attract or maintain a stable source of funding. The determination of the rate of interest to offer to attract depositors is a commercial decision, which is the sole responsibility of the board and management of each bank.

Neither the Central Bank of Ireland nor I have a role in setting the interest rates offered by banks on monies held on deposit. Although the State is a shareholder in some of the banks operating in the jurisdiction, those entities must also be run on a commercial and independent basis, and their independence in this regard is protected by the relationship framework agreements.

In terms of the interest rates currently available on deposits, the European Central Bank (ECB) released March 2023 Euro Area Bank Interest Rate Statistics on 5 May 2023. The Central Bank of Ireland Retail interest rates release will follow tomorrow, on 10 May 2023, when it can be accessed at:www.centralbank.ie/statistics/data-and-analysis/credit-and-banking-statistics/retail-interest-rates

I am informed by the Central Bank of Ireland that:

• Interest rates on household overnight deposits stood at 0.03 per cent in March 2023, while the euro area equivalent was 0.151 per cent.
• Interest rates on new household deposits with agreed maturity was 1.14 per cent in March in Ireland, while the euro area equivalent was 2.11 per cent.
• Interest rates on outstanding deposits’ rates with agreed maturity was 0.43 percent in March 2023 an annual increase of 34 basis points since March 2022. Interest rates on outstanding deposits’ rates with agreed maturity in the euro area was 1.51 percent in March 2023.

• First, when interest rates were low (or negative up until July 2022), there was effectively little or no difference between the return on overnight versus term deposits for savers; and
• Second, much of the current build-up of deposits represents ‘passive’ pandemic savings – that is, savings that households built up when there were restrictions on economic activity and therefore reduced spending opportunities during the pandemic.