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Dáil Éireann debate -
Tuesday, 11 Jul 1972

Vol. 262 No. 7

Ceisteanna—Questions. Oral Answers. - Domestic Savings.

31.

asked the Minister for Finance if he has any plans to provide further encouragement of internal savings; and whether the rate of interest on Post Office savings accounts will be increased to encourage internal savings.

Methods of encouraging domestic savings are constantly under review and the increase in domestic small savings over the past few years is a gratifying indication that the various established and newly introduced schemes are attractive to the small saver.

I do not propose any immediate change in these various savings schemes.

Is the Minister satisfied that the incentives for investment in the Post Office savings are comparable with those available for investment in building societies?

Yes, I would think so, and I think the figures, as I say, bear it out. The considerable increase in the amount of small savings in recent years would seem to indicate that the lines we are going on are satisfactory.

Could the Minister say if the rates of interest on Post Office savings are equal to the rates offered by building societies?

The Post Office figure is 4 per cent which is tax free on the first £70 of interest and it is equivalent to over 6.2 per cent gross on the first £1,750 of savings, or double this amount for a husband and wife who keep separate accounts. This is a reasonable rate of interest on deposits which are withdrawable on demand and have no risk of capital depreciation.

What is the figure for the building societies?

I have not got it offhand.

Is it nearer 9 per cent—over 8 per cent? There is a big difference between 6.2 per cent and nearly 9 per cent.

There are other factors that come into the decision by an investor as to what form of investment he will put his money into and the results seem to indicate that the facilities provided for small savings are regarded as satisfactory by small savers, having regard to the increase in the amount of savings over recent years.

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