The state should step in and provide better returns to consumers on their deposits, a financial expert has said.
Robert Whelan, Managing Director of Rockwell Financial Management, said consumers were the victims of a lack of competition in the market when it came to returns on deposits.
He was speaking as banks here and in other economies continue to report a surge in profits on the back of interest rate increases introduced by the European Central Bank.
While the banks have not passed the full extent of rate increases on to fixed and variable rate mortgage holders, they have also limited the scope of rate increases that they offer to depositors.
"If you don't have competition, the regulators are going to have to step in," Robert Whelan told Morning Ireland.
"Banks have managed to convince people that it's perfectly reasonable to take our money, make significant profits on it and not allow us to participate in that," he added.
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He suggested that a state intervention through the Post Office and state savings schemes would be the ideal vehicle, adding that a 16% yield over 10 years that is currently available was "pretty awful" compared to what was now available on a government bond.
In the UK, the Financial Conduct Authority has issued a warning to financial institutions that they will face "robust action" if they offer unjustifiably low savings rates to consumers.
However, it appears that the banks here do not need to incentivise people to put money on deposit.
Savings rates among consumers peaked during the pandemic contributing to a surge in bank and credit union deposits which now stand at a cumulative €140 billion.
