Bank of Ireland has announced a 0.25% reduction in interest rates on its 12 and 18-month fixed-term deposit accounts, effective from Thursday as the bank responds to European Central Bank policy changes.
The rate cuts will see the bank’s Advantage 12-month fixed-term savings account drop from 2.00% AER to 1.75%, while the 18-month product will fall from 2.48% AER to 2.24% AER.
Last-Minute Opening Window
Customers currently in the process of opening new 12 or 18-month fixed-term deposit accounts can still secure the higher rates if they complete their applications by close of business on June 4th. This provides a brief window for savers to lock in the current rates before the cuts take effect.
Existing customers with fixed-term deposits will continue to earn interest at their original contracted rates until their terms expire, protecting current account holders from the immediate impact of the reduction.
Other Products Remain Unchanged
Bank of Ireland confirmed it is not making changes to interest rates on other account types at this time. Notably, the bank’s SuperSaver account continues to offer 3.00% AER for 12 months, maintaining its position as one of the more competitive savings products in the current market.
The selective nature of the cuts suggests the bank is responding to specific market pressures on fixed-term products while maintaining competitiveness in other savings categories.
ECB Policy Impact Cited
A Bank of Ireland spokesperson attributed the rate changes to broader monetary policy trends, noting that the European Central Bank “has lowered interest rates by the cumulative 1.75%” in recent periods.
The spokesperson emphasized that Bank of Ireland’s response has been measured, explaining that “in the same period, Bank of Ireland has reduced its 12 and 18-month term deposit rates by a total of 0.75% including the changes announced today.”
This suggests the bank has absorbed some of the ECB rate impact rather than passing it entirely to customers, though savers are still experiencing reduced returns on fixed-term deposits.
Savings Market Pressures
The rate cuts reflect broader pressures in the Irish savings market as banks adjust their deposit pricing in response to changing central bank policies and competitive dynamics. Fixed-term deposits have been particularly affected as banks seek to balance customer attraction with profitability concerns.
For savers, the changes highlight the ongoing challenge of securing attractive returns in a changing interest rate environment, with banks increasingly selective about which products offer premium rates.
The timing of the cuts, with the brief grace period for new applications, suggests Bank of Ireland is seeking to manage the transition while honoring commitments to customers already engaged in the application process.