Irish households are missing out on hundreds of euro a year by leaving savings idle in bank accounts, according to Revolut.
According to the neobank’s European Wealth Drain Index, up to €150.6 million in passive cash is being held by Irish households, a sum that is being eroded by inflation. It also represents a loss of up to €11 billion in annual growth capital from the economy, hampering competitiveness.
Revolut’s figures put the loss at up to €731 per €10,000 that is left sitting in lower interest bank accounts rather than being invested. A further €210 per €10,000 is being lost to inflation, with the average one-year deposit rate for Irish bank accounts at currently 1.75 per cent, less than the 2.1 per cent rate of inflation.
Despite this, the data shows inertia among Irish people. More than two-thirds of savers – 66.5 per cent – said they have never switched banks for a better rate, and almost 16 per cent of Irish citizens do not have a savings buffer.
More than 40 per cent underestimate or are unaware of the impact of inflation on their money, while three quarters said they use multiple financial apps, which can impact investing by making it too complex to transfer money or get an overview of ability to save.
More than a third blamed risk perception and a lack of knowledge for their lack of investment, but 41 per cent said they would start if offered micro-investing opportunities, while almost 40 per cent want transparent risk information.
“For too long, traditional banks have relied on consumer inertia, leaving their money stranded in low yield accounts while inflation erodes wealth. We built Revolut to break that cycle,” said Rolandas Juteika, Head of Wealth & Trading at Revolut.