Report & Financial Statements for the Year ended 31st December ...

RETAIL SAVINGS
Against the sum of €1,749 million outstanding in
accrued interest on the savings schemes, there is a total
of €969 million in the Small Savings Reserve Fund. This
represents 55 per cent of the accrued interest.
Administration Costs
The administration fees paid to An Post and the Prize
Bond Company in respect of the savings schemes in
2004 totalled €44.6 million, as detailed below:
Savings Schemes €m
Savings Certificates 4.1
Savings Bonds 2.3
Instalment Savings 2.5
Prize Bonds 1 6.9
Savings Stamps 1.0
Post Office Savings Bank 2 27.8
Total: 44.6
Negotiations are ongoing with An Post with the objective
of reducing the administration costs of these schemes, in
particular the Post Office Savings Bank.
Rates Of Return
• Savings Certificates: 16 per cent over a 5 1 ⁄ 2 year
period, equivalent to an average annual return
of 2.74 per cent if held to maturity. Minimum
investment is €50, with a maximum of €80,000 for
an individual and €160,000 for a joint holding.
• Savings Bonds: 8 per cent over 3 years, equivalent
to an average annual return of 2.6 per cent if held
to maturity. Minimum investment is €100, with
a maximum of €80,000 for an individual and
€160,000 for a joint holding.
• Instalment Savings: 15 per cent over 5 years,
equivalent to an average annual return of 2.57 per
cent. Minimum monthly investment is €25, with a
maximum monthly investment limit of €500.
Post Office Savings Bank
The POSB deposit base at end 2004 was €1,301 million,
an increase of over 15 per cent during 2004. Included in this
figure is the total outstanding in Special Savings Incentive
Accounts (SSIAs), amounting to €258 million at end 2004.
There are two SSIA products, one fixed rate and one variable
rate. The fixed rate product accounts for over three quarters
of all SSIA investments. Both products offered an initial
interest rate of 4 per cent per annum. Since July 2003, the
variable interest rate has been 2 per cent per annum. The
variable interest rate account carries a guarantee that it will
not fall more than 1 percentage point below the European
Central Bank main refinancing rate.
The current interest rates on the other POSB accounts are
as follows:
Demand Account
Rate per annum
• Under €6,000 0.10%
• €6,000 and over 0.25%
Demand Account Plus Rate per annum
• Under €30,000 1.0%
• €30,000 and over 1.5%
Interest on Savings Certificates, Savings Bonds and
Instalment Savings is exempt from Irish income tax,
and the current rates of return are as follows:
1 These fees were paid to The Prize Bond Company. The other fees are paid directly to An Post.
2 Fees relating to the Post Office Savings Bank (POSB) are paid from the POSB Fund.
Report and Accounts for the year ended 31 December 2004
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