Dáil Éireann debate -
Wednesday, 10 Jun 1998

Vol. 492 No. 2

Written Answers. - Savings Certificates Scheme.

Jim O'Keeffe

Question:

52 Mr. J. O'Keeffe asked the Minister for Finance if he has satisfied himself with the running of the savings certificates scheme; if he will give details of the administration, monitoring and supervision involved; and the plans, if any, he has for its future. [13564/98]

Minister for Finance (Mr. McCreevy)

My functions in relation to the savings certificates scheme have been delegated to the National Treasury Management Agency and it is operated by An Post on the NTMA's behalf.

Savings certificates are the most important and successful of the Government savings schemes. Almost £2.15 billion was invested in savings certificates at 31 December 1997. This represented over 50 per cent of the total outstanding in the Government savings schemes. An estimated £1.13 billion was outstanding at end-1997 in accrued interest on savings certificates. The fees paid to An Post by the National Treasury Management Agency in respect of savings certificates in 1997 amounted to £3.1 million, or less than 0.15 per cent of the outstanding principal.

There have been a total of 15 issues of savings certificates. The most recent was introduced on 5 May last. This new issue offers investors a return of 25 per cent after five years and six months, which is equivalent to an average annual rate of interest of 4.14 per cent. This return is tax free, but investment in the new issue of savings certificates is subject to a maximum of £60,000 or, in the case of a joint holding, £120,000. There is a minimum investment of £50.

An Post's accounts in relation to savings certificates are audited by KPMG on behalf of the Comptroller and Auditor General. In addition, An Post complies fully with provisions of the Criminal Justice Act, 1994, in relation to measures and procedures to counteract money laundering when accepting moneys for investment in savings certificates.

Some delays in the operation of the savings certificates scheme have occurred; in particular, delays in issuing documentation at times of high volumes of transactions. A major factor contributing to these delays was the fact that savings certificates have been issued continuously since the 1920s and the records of investments made before 1985 have not been computerised. However, post-1985 records are held on computer and the National Treasury Management Agency has recently approved a programme of work by An Post for the computerisation of the earlier records. The target date for completion of this work is the end of this year.

I am pleased to say that An Post has recently introduced new procedures for informing customers when their investments in savings certificates mature. Previously, this was done only in response to customers' inquiries, but now all investors will automatically receive maturity notices. I greatly welcome this development, and look forward to further improvements in the quality of customer service.