asked the Minister for Finance if he will take steps to enable the Trustee Savings Banks to pay a more attractive rate of interest on deposits and to permit them to provide personal loans to clients.
Ceisteanna—Questions. Oral Answers. - Trustee Savings Bank Deposits.
56.
The Trustee Savings Banks have been enabled to pay a more attractive rate of interest by the provision in the Appropriation Act recently passed by the Oireachtas authorising an increase in the traditional rate of 2½ per cent to 3½ per cent. As the first £2,000 of deposit in the case of a single person, and the first £4,000 in the case of a married couple, earn income free of tax, the new rate is equivalent to a grossed-up rate of 5.4 per cent on savings up to these amounts for income tax payers. As liability to income tax starts at £6 a week for a single person and £10 5s a week for a married couple, it is likely that most depositors in the Savings Banks are income tax payers.
As regards the providing of personal loans, I see no reason to justify the entry of the savings banks, the funds of which are guaranteed by the State, into a field adequately served by the commercial banks and other financial institutions.