Dáil Éireann Debate, Wednesday - 11 March 2015
62. Deputy Brendan Griffin asked the Minister for Finance the reason the accrual of interest on State savings bonds will not continue for the period between the maturity date and the commencement date of the new purchase; the projected savings that will be achieved by this measure; and if he will make a statement on the matter. [10654/15]
Amharc ar fhreagraThe National Treasury Management Agency (NTMA) manage the State Savings Products which includes State Savings bonds. State Savings fixed term, fixed rate products have a pre-determined maturity date, i.e. either 3, 4, 5½, 6 or 10 years after the date of purchase.
The NTMA has advised that in advance of the date on which the State Savings fixed term product matures, the holder is issued with a letter asking them for instructions with regard to the maturity, whether that is to re-invest some or all of the maturing amount in any one of the then available State Savings products (i.e. fixed rate, fixed term products or deposit accounts or prize bonds) or to have some or all of the maturing amount repaid to the holder. If the holder of the fixed term State Savings product does not respond before the maturity date to the "Maturity Options" letter issued to them, the money remains in the Exchequer until such time as payment instructions are received from the holder.
Given that the original investment is for a pre-determined period at a pre-determined rate, on the maturity date, the holder is entitled to the full maturing amount (Principal and Interest / Bonus as appropriate) that they were promised when they purchased the State Savings product, so there is no savings to be made.
