Jim O'Keeffe
Question:74 Mr. J. O'Keeffe asked the Minister for Finance if he will outline details of the Post Office Savings Bank in relation to its administration, monitoring and supervision; and the plans, if any, for its future. [13565/98]
Written Answers. - Post Office Savings Bank.
My functions in relation to the Post Office Savings Bank (POSB) under sections 103, 104 and 109 of the Postal and Telecommunications Services Act, 1983 have been delegated to the National Treasury Management Agency and the POSB is operated by An Post on the NTMA's behalf.
Moneys raised through the POSB are paid by An Post into a special fund created under the Post Office Savings Bank Act, 1861. This fund, known as the Post Office Savings Bank Fund, is under the control of the National Treasury Management Agency. Moneys in the fund are primarily lent to the Exchequer either as ways and means advances or through the purchase of Government securities. The Exchequer effectively underwrites the solvency of the fund and the moneys deposited in POSB accounts are, therefore, State guaranteed.
There are two categories of deposit accounts offered by the POSB, as follows:
The demand deposit account, which is subject to DIRT at the full rate of 24 per cent; and
Deposit Account Plus, which is a special savings account attracting DIRT at the reduced rate of 20 per cent and with a requirement to give a minimum of 30 days notice of withdrawal.
The current rates of interest on these accounts are as follows:
Demand Account
|
For amounts under £5,000 |
0.50% p.a. |
|
For amounts of £5,000 and over |
1.00% p.a. |
Deposit Account Plus
|
For amounts under £5,000 |
3.50% p.a. |
|
For amounts of between £5,000 and £24,999 |
4.50% p.a. |
|
For amounts of between £25,000 and £39,999 |
4.75% p.a. |
|
For amounts of between £40,000 and £50,000 |
5.00% p.a. |
The total amount on deposit in the POSB at 31 December 1997 was £465 million, of which £407 million was held in demand deposit accounts and the balance of £58 million in Deposit Account Plus. During 1998 to date, there has been a very modest growth in the POSB deposit base. The total amount on deposit at 8 June 1998 is almost £467 million. The management fees for the POSB amounted to £12.3 million in 1997.
The accounts of the Post Office Savings Bank are audited by KPMG on behalf of the Comptroller and Auditor General. Moreover, the POSB complies fully with the provisions of the Criminal Justice Act, 1994, in relation to measures and procedures to counteract money laundering.
There are no plans at present to extend the business of the POSB beyond the two categories of deposit accounts now on offer. However, significant improvements in the quality of customer service are now being achieved under An Post's counter automation programme.