What’s next for interest rates in Ireland?

The European Central Bank (ECB) has cut interest rates eight times in the last nine months, and the main deposit rate currently sits at 2%.

Read on to discover if and when interest rates are likely to increase or decrease again, and what this could mean for savings accounts.

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.

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.

In Ireland, the annual Harmonised Index of Consumer Prices (HICP) stayed at 1.6% in July. The Consumer Price Index (CPI), meanwhile, eased to 1.7% from 1.8% in June.

Economists widely expect the ECB to keep its deposit rate at 2% at the September 2025 meeting, marking a likely pause in the rate-cut cycle. While markets still price in about a 70% chance of one more cut by year-end, many analysts now think further easing is unlikely given sticky inflation risks. In short, the ECB looks set to hold steady for now, with only a slim chance of another cut this year.*

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 eight times since, and the main deposit rate currently stands at 2%.

According to new figures from the Central Bank of Ireland, the average rate on new Irish mortgage agreements at end-June 2025 was 3.60%, down slightly from 3.61% in May.

Irish mortgage rates are now the seventh highest in the eurozone, where the average rate is 3.32%.

Irish interest rates are expected to remain stable in the near future, with a small possibility of another cut in 2025.

Put simply, ECB rate cuts mean that savings interest rates might not stay at this level for long.

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 exploring 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.

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, a fixed interest rate account may offer more competitive returns. This type of savings account is often chosen for long-term savings goals.

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 interest rates in Ireland, building up your savings can help you stay prepared for unexpected expenses. Whether it’s to take advantage of competitive interest rates whilst they're still around, or to protect yourself and your family, opening a savings account can help you get more from your money.

To compare savings accounts from 25+ trusted European banks, register for a free Raisin Account today.

*https://www.reuters.com/markets/europe/steady-economic-outlook-brings-end-ecb-rate-cuts-economists-say-2025-09-04/?utm_source=chatgpt.com