Dáil Éireann Debate, Thursday - 12 December 2013
53. Deputy Terence Flanagan asked the Minister for Finance the background regarding the lowering of interest rates by the National Treasury Management Agency for An Post savings products; and if he will make a statement on the matter. [53607/13]
View answerState Savings is the brand name used by the National Treasury Management Agency (NTMA) to describe the State's personal savings products issued by the Minister for Finance acting through the NTMA. An Post is the NTMA's selling agent for these investments. All State Savings money is part of the sovereign debt of Ireland which is managed by the National Treasury Management Agency (NTMA).
The NTMA keeps the suite of State Savings products and the interest rates paid on them under constant review. These new interest rates announced by the NTMA on 8 December 2013 reflect the reductions in interest rates in the savings market and in sovereign bond yields generally.
The newly announced reduction in interest rates should also be of benefit to Exchequer finances through lowering the cost of servicing the National Debt. The Government’s objective is to raise money to fund the Exchequer at the lowest cost to the taxpayer while remaining competitive in the prevailing market conditions.
The interest rates on State Savings products take account of the greater flexibility and certainty of return which these products offer, especially in the case of encashment before the normal maturity date as compared to, for example, Government Bonds. The State Savings rates also reflect the fact that these products are largely exempt from DIRT.
Irish savers continue to be very supportive of the Government in its task of borrowing money to fund the Exchequer and the State Savings products remain an important source of this funding. In 2012, individuals provided the Government with net funding through the range of State Savings products of over €2 billion and between January 2013 and end-November 2013 the net funds received from State Savings products was €1.7 billion.
