The National Treasury Management Agency (NTMA) has cut the interest rates attached to several State savings products and reduced the prize bond fund.

The agency said the changes reflect lower interest rates in financial markets generally.

There is approximately €18.8 billion held in various State savings schemes, including €4 billion in prize bonds.

The new rates, which took effect from Sunday, apply to the Savings Certificates, Instalment Savings, National Solidarity Savings Bond and Post Office Savings Bank (POSB) deposit accounts.

The new rates will not affect existing holders.

The NTMA is also making changes to the prize bond fund and prize structure.

From next month, the variable interest rate used to calculate the prize fund will reduce to 0.35 per cent from 0.5 per cent, meaning the prize fund will be smaller.

Prize

Instead of two €1 million top prizes a year, there will now be four €250,000 top prizes, an effective cut of €1 million in the top prize.

The four €250,000 prizes will be awarded in the last weekly draws in March, June, September and December, the NTMA said. The top prize in all other weekly draws will be €50,000.

The various State savings products, administered by An Post, have become increasingly popular in recent years at they offer some of the highest interest rates around and most are not liable for deposit interest retention tax (Dirt).

“The new rates reflect the reductions in interest rates in both Sovereign bond yields and the retail savings market,” an NTMA spokesman said,

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“State Savings interest rates were last adjusted in June/July 2016, with the exception of prize bonds where the rate for the prize bond fund was adjusted in August 2017,” he said.



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