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Debt for Government, savings for people! Irish people deposited another €1bn into savings accounts

DUBLIN: Irish people spend money on one side and deposit it in the bank on the other. This December alone, another billion euros in savings reached Ireland’s bank accounts. Even a portion of the COVID payments made to the people by the Government went to the banks as deposits.

Central Bank reveals that close to €1 billion was spent on bank and credit union savings accounts in December alone. It reached an all-time high of €125 billion at the end of last year.

Credit and debit card usage increased by 21% in December compared to November. According to the central bank, the money was spent on the retail sector and restaurants. Following the easing of restrictions in December, costs in restaurants and the dining sector increased by 66% compared to November.

Due to the continuous lockdown throughout the last year, people had less spending options, and most of them worked from home. Last year, an additional €14.2 billion was put into savings deposit accounts in banks and credit unions. This does not take account of the €22.7 billion in State Savings and the An Post Savings Bank.

In 2020, households pay down more debt than they took out. Drawdowns on repayment loans and mortgages exceeded €58 million. The central bank said that the decrease in borrowing would have been more pronounced had it not been for this year’s introduction of payment breaks.

Banks now charge only 0.01% interest on demand deposits. Banks also charge negative interest rates on large investors such as credit unions and pension funds.

Credit unions have reduced the savings of members to €10,000. The National Treasury Management Agency last week slashed interest rates on state savings products and refunded the amount available on price bonds.

Only An Post Savings offers high interest rates. Most of them do not attract DIRT tax.

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