What’s next for interest rates in Ireland?
The European Central Bank (ECB) has cut interest rates for the seventh time in a year, with the latest in response to volatile global markets, and the main deposit rate currently sits at 2.25%.
Read on to discover if and when interest rates are likely to increase or decrease again, and what this could mean for savings accounts.
Inflation in Ireland rose to 2.0% in March, up from 1.8% the previous month
The ECB has cut interest rates seven times in a year
Competitive interest rates may not be around for much longer
Understanding interest rates
Interest rates play a key role in how your savings grow over time. Whether you're comparing fixed or variable rate accounts, understanding how interest is calculated—and what influences it—can help you make smarter financial decisions.
Learn more in our guide to interest rates, or dive deeper into how ECB rates impact your savings.
What is the current ECB rate?
Updated: 17.04.2025
At its most recent meeting on 17 April 2025, the Governing Council of the ECB decided to lower the deposit facility rate by 25 basis points, to 2.25%. The interest rates on the main refinancing operations and the marginal lending facility were also lowered to 2.40% and 2.65% respectively, with effect from 23 April.
These rates are used as a reference point by Irish banks when setting their own interest rates on loans and deposits.
The next ECB rate announcement will be on 5 June 2025.
What is the current rate of inflation in Ireland?
In March 2025, the annual inflation rate in Ireland reached 2%, the highest it's been since July 2024. This is an increase from the 1.8% recorded in February.
What's new? April 2025
The ECB has cut interest rates again. So, what does this mean for Irish savers?
While this will drive down mortgage rates, it will also impact rates for savers. Time could be running out to take advantage of competitive fixed rate offerings.
What’s happened to interest rates over the last 12 months?
Following ten consecutive rate hikes that began in July 2022, the ECB lowered its record-high deposit rate by 25 basis points in June 2024. It has been cut another six times since, and the main deposit rate currently stands at 2.25%.
What is the average rate on new Irish mortgage agreements?
According to new figures from the Central Bank of Ireland, the average rate on new Irish mortgage agreements at end-February 2025 was 3.79%, down from 3.82% in January.
Irish mortgage rates are now the fifth highest in the eurozone, where the average rate is 3.33%.
Are interest rates going up or down in Ireland?
It looks as though interest rates in Ireland will continue to decrease, with the ECB lowering its deposit rate and further cuts expected. However, this is dependent on the wider economy, and what happens in the eurozone. Trump’s unpredictable tariff policies are making it challenging for the ECB to forecast interest rates accurately.
The information provided here is for informational and educational purposes only and does not constitute financial advice. Please consult with a licensed financial adviser or professional before making any financial decisions. Your financial situation is unique, and the information provided may not be suitable for your specific circumstances. We are not liable for any financial decisions or actions you take based on this information.
What does this mean for Irish savers?
Put simply, ECB rate cuts mean that high savings interest rates may not be around for much longer.
Here are some things for Irish savers to consider in the current interest rate environment:
- It's important to note that interest rates can vary depending on the lender, and the type of savings account.
- Shop around for the best savings interest rates. You can use a comparison website to compare the interest rates offered by different Irish banks.
- Consider switching to a fixed term savings account. Fixed term savings accounts typically offer higher interest rates than demand deposit accounts, but you will not be able to access your money during the fixed term.
- Check that your savings account is covered by the Deposit Guarantee Scheme. The Deposit Guarantee Scheme protects your savings up to €100,000 in the event that your bank fails.
What kind of savings account is best for Irish savers?
So, what's the best savings account for you? This will depend on various factors, for example the amount you have to invest, and whether you’ll need access to your money. If you can afford to lock your money away for a set period, you might opt for a fixed interest rate product. This type of savings account typically offers the most competitive rates, and is ideal for long term savings goals.
Start saving with Raisin Bank
Public Expenditure Minister, Paschal Donohoe, has said:
“Looking to put money in other parts of Europe, and other banks elsewhere in Europe, is not an unpatriotic act. It’s the way the single market functions.”
Regardless of what happens to the interest rate in Ireland, there’s never a bad time to save. Whether it’s to take advantage of competitive interest rates whilst they're still around, or to protect yourself and your family from unforeseen financial expenses, opening a savings account will give you more for your money.
To find the best savings account for you, register for a free Raisin Account today and compare interest rates from banks across Europe.