Is your savings account costing you money? Customers warned they could be missing out on €500 over next two years

This is due to the failure of most people to seek out the best rates in the market, according to research carried out by savings and investment brokerage Lightyear, which is backed by entrepreneur and Virgin founder Richard Branson.

The findings come as Dutch digital bank Bunq said it will offer its users a savings rate of 2.46pc, guaranteed for three months.

The new rate is in spite of the fact the European Central Bank (ECB) is set to cut the deposit rate it pays to banks from 4pc to 3.75pc today.

Bunq said: “Bunq’s Easy Savings plan is free for users and offers the ultimate flexible saving option, offering users the ability to withdraw any amount up to two times a month, while guaranteeing a 2.46pc interest rate for three months.”

This new offer is likely to appeal to savers who want a guaranteed competitive return on their money but who do not want to lock it away for a prolonged period of time.

Last week, Bank of Ireland surprised the market by introducing two new deposit accounts paying up to 3pc.

Bank of Ireland’s plan to introduce two new higher-paying accounts for savers was seen as a direct response to Revolut entering the Irish market for savings.

The money app claims it has 2.7 million customers in this country.

And in the last few weeks, digital bank N26 launched a savings account that will offer Irish customers rates as high as 4pc with instant access to their money.

Berlin-headquartered N26 will pay interest of 2.8pc for those with ­Standard, Smart and You accounts on savings, with the more expensive N26 Metal customers getting a 4pc rates.

Lightyear, which offers multi-currency investment and interest accounts to clients in Ireland, the UK and other European states, said ECB and Central Statistics Office figures show 89pc of Irish savings are sitting in overnight deposit accounts with an average rate of 0.13pc.

It said Irish savers are missing out on better rates by keeping so much of their money in on-demand bank accounts.

Lightyear offers those with ­uninvested cash the current ECB deposit rate, minus a flat 0.75 percentage point fee.

Ahead of this week’s ECB rate cut, the Lightyear rate on uninvested euro is 3.25pc.

Its analysis shows the average total savings per person in Ireland is €6,000 and the average amount an Irish person saves each month is €370.

According to Lightyear’s analysis, the amount of interest each Irish individual would earn over these next two years would be €500 higher if they moved their savings into accounts earning an average of 2.5pc.

It found that an average saver would earn just €27 over two years by leaving €6,000 in a demand deposit account, but would earn €523 from an account paying 2.5pc in interest.

Daragh Cassidy, of price-comparison site Bonkers.ie, said there has been a flurry of activity in the savings sector in Ireland over the last few weeks, pointing to the new instant-access savings accounts launched by N26 and Revolut, as well as Bank of Ireland increasing the rate on some its fixed-term deposit accounts.