Bank of Ireland pays €545,000 to young customers over interest rate failure

Bank of Ireland has paid €545,400 in redress to holders of Young Savers accounts over a failure to properly communicate the interest rate that applied to the accounts.

The bank has also decided to slash the interest rate that currently applies on the savings account from 2.5 per cent annual equivalent rate (AER) to 0.25 per cent from November 13th.

On average, the bank has paid €202 in compensation to some 2,700 Bank of Ireland customers impacted by the interest rate failure.

The savings account is available for children under 13 and the bank introduced a 2.5 per cent AER in 2017, which would have been a market leading rate at the time. Interest rates offered by banks on such accounts now are close to zero given the prevailing lower-for-longer global interest rate environment.

The 2.5 per cent rate applied to sums up to an initial €5,000. From the time the balance went above €5,000 the rate dropped to 0.25 per cent. This applied to the full balance and also continued to apply even if the balance again went below €5,000.


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