asked the Minister for Finance if he will increase the rate of interest payable on savings in the post office so as to restore the ratio which existed between rates of interest in private banks and the post office prior to devaluation and the ensuing increase in private banks' rates of interest on savings.
Ceisteanna—Questions. Oral Answers. - Post Office Savings.
29.
The Post Office Savings Bank rate is a stable rate fixed by legislation and does not vary up and down with the commercial banks' deposit rate. Depositors in the Post Office are thus assured of a fixed rate which will not be affected by market variations. This arrangement has in general worked to the advantage of these depositors as over the years, apart from a short period in 1966 and the present time, the Post Office rate has always been higher than that paid by the banks. I am, however, watching the situation and should it appear that interest rates are likely to continue for a long period at the present high level I will consider what measures may be necessary to improve the relative position of depositors in the Post Office.
Did I hear the Parliamentary Secretary aright when he said that this system worked to the advantage of the depositors in the Post Office, and if I did, is he aware of the fact that over the past 20 years, inflation has taken from the depositors in the Post Office more than the interest they got in any given year from the Post Office?
The question relates to interest rates——
Is the Parliamentary Secretary aware that the Post Office is the bank used by small depositors? The present rate is 3½ per cent as against 4¼ per cent in the banks. Surely he will agree that it is unfair to ask small depositors to invest their money in State enterprises at three-quarter per cent less than the rate of the commercial banks, taking into account that the Post Office savings rate usually exceeded the bank rate by about one per cent?
The reply dealt adequately with that aspect of the situation.
Does the Parliamentary Secretary consider it fair that the working man and other such people who invest small sums in the Post Office should have to accept a rate of 3½ per cent when the ESB a few weeks ago had to pay 7¼ per cent on £97½ to secure money?
The reply has intimated that if there is any question of a long term disadvantage to the people who put their money in the Post Office, the necessary measures will be considered.