State savings in Ireland

If you don’t want to pay tax on your savings interest, you might be tempted to invest in a state savings product. But exactly what are state savings and are they the best option for Irish savers?

On this page, you’ll learn how state savings in Ireland work, the different types of products available and how they compare with other savings accounts on the market (state savings may be tax-free, but they may not earn you as much interest as you’d get with other savings accounts).

Ireland State Savings is the brand name for the range of government personal savings products offered by the National Treasury Management Agency (NTMA). They’re also referred to as An Post State Savings or Post Office Savings. 

When you invest in an Ireland State Savings product, you’re effectively placing your money directly with the Irish government. The government is obliged to repay all state savings money, thereby guaranteeing savers complete protection by the state. You can choose from several different types of state savings products, including savings bonds, savings certificates, national solidarity bonds and prize bonds.

To access your initial investment and any interest earned, you simply need to give seven days’ notice. There’s no penalty for accessing your cash early, since repaying you is part of the Government’s obligation.

There are several types of Ireland State Savings products available. Here’s a brief overview of the products you can choose from:

See how these Ireland State Savings compare with the best-paying savings accounts at Raisin Bank:

Generally speaking, Ireland State Savings and An Post State Savings refer to the same government-backed savings products.

Ireland State Savings are offered by the NTMA and can be bought directly via the Ireland State Savings website. An Post is responsible for the sale and administration of Ireland State Savings products, which you can open through Irish post offices.

Whether you call them State Savings, An Post State Savings or Post Office Savings, you’re effectively referring to the same range of savings products.

In September 2023, the National Treasury Management Agency (NTMA) announced increases in the interest rates on State Savings products, including offers Fixed-Term fixed-rate savings products, Prize Bonds and Deposit Accounts, as well as trebling the prize bond fund.

Finance Minister, Michael McGrath, said: “I welcome today’s announcement by the NTMA to increase rates. This will provide State Savings customers with an increased return on all new fixed-term savings and deposit accounts, along with an increased Prize Fund for Prize Bond holders from 1 October 2023, while also supporting the valuable conduit that State Savings provide for the Irish State to raise funding.”

State Savings have no fees or transaction charges when lodgements and withdrawals are made and the State Savings Fixed Term Products are also tax free savings products.

One of the main benefits of Ireland State Savings is that any returns you make are tax-free. Interest or prize bond winnings are exempt from deposit interest retention tax (DIRT), which is currently set at 33%. Returns are also exempt from income tax, social insurance (PRSI) and capital gains tax in Ireland.

For many people, the flexibility and tax-free status of State Savings is an attractive proposition. Although these are worthwhile benefits, they need to be weighed against the rate of return.

State savings in Ireland may still offer better returns than other products from some Irish banks, but it’s important to check the facts before you commit. These products often highlight the ‘total return’ figure, which takes into account how much you would make over, say, a 10 year deposit. This total figure might seem attractive, but it’s much better to concentrate on the AER (annual equivalent rate) percentage, which allows for more meaningful comparison.

For example, let’s say you invest €1,000 into a savings bond for 10 years that promises a 16% return rate. At the end of the term, you’ll receive €1,160. While this €1,160 technically amounts to a 16% increase from the original amount, it could be misleading as you might think based on the advertised 16% return that you would get 16% interest per year. However, your final figure of €1,160 actually equates to an AER of 1.5%, which you then earn 10 times (once per year).

Ireland State Savings still have their place, particularly if you’re looking for a tax-free way to save, but it’s worth comparing a range of products from the wider market to ensure you’re getting the best return.

With some State Savings no longer offering competitive rates of return, it might be worth looking beyond Ireland’s borders if you want to make the most of your savings in a low risk product. The Raisin marketplace allows you to compare high-interest savings products from a range of European banks. 

Unlike the Ireland State Savings bond which has a minimum duration of three years, our minimum term for selected fixed term deposits is just six months. You still benefit from the security of a guaranteed interest rate, but with a wider range of saving terms to choose from. Simply compare the offers in the table to find the perfect product for your needs.

What’s more, all savings invested through our European partner banks are protected under the European deposit guarantee scheme (EDIS). Following the introduction of EU-wide legislation, up to €100,000 per person, per banking institution, is protected in the event your bank fails.

Saving in Europe has never been easier. Simply register for a Raisin Bank Account to access a wide range of competitive savings accounts from across the continent.

From high interest fixed term deposits to flexible demand deposit accounts, you’re sure to find a product that meets your savings goals.