Government to Launch New Savings and Investment Account Scheme for Households

Dublin: A new savings and investment account scheme aimed at boosting long-term returns for Irish households will be brought to Cabinet shortly, Finance Minister Simon Harris has announced.

The proposed framework seeks to address concerns that traditional bank savings accounts in Ireland offer limited returns, typically ranging from 0.5% to 3%, with interest earnings subject to taxation of up to 33%. As a result, real returns for savers remain modest.

The initiative follows encouragement from the European Commission, which has been promoting the introduction of structured savings and investment accounts across EU member states. Similar schemes are already operational in several European countries. Harris acknowledged that Ireland has lagged behind in fostering retail investment and supporting long-term savings participation.

Highlighting the scale of household deposits, the minister noted that approximately €170 billion is currently held in Irish bank accounts. He described Irish families as prudent savers but said much of this capital remains idle, generating limited returns for account holders and minimal broader economic impact.

Last week, the Banking Federation of Ireland (BPFI) called on the government to establish a Domestic Savings and Investment Account. The federation argues that such a scheme would help channel domestic capital into Irish enterprises and support wider European economic growth.

BPFI Chief Executive Brian Hayes described the proposal as a straightforward, internationally recognised mechanism to enable families to build wealth over time. He noted that similar accounts typically invest in equities, bonds or diversified funds, focusing on tax efficiency and long-term capital growth.

Drawing on successful international models, the Government is considering incorporating tax incentives, including potential relief on investment gains, to make the scheme more attractive. The core objective is to encourage households—particularly middle-income families—to move beyond low-interest deposit accounts and participate in higher-return investment opportunities, especially amid elevated capital gains tax rates.

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