AIB is the latest bank to reduce its saving and deposit rates.

It follows recent reductions by Bank of Ireland, Bunq, N26 and Raisin since the start of the year.

AIB is reducing the rate on two of its fixed-term deposit accounts by 0.25 percentage points.

It’s also reducing the minimum amount required to open a fixed-term account from €15,000 to €5,000.

The bank’s fixed-term two-year rate will change from 3.02% to 2.77% APR (annual equivalent rate), and its fixed-term one-year rate will change from 2.5% to 2.25% APR.

The reductions are effective from today.

The bank said it was the first time it had reduced its savings rates since the European Central Bank (ECB) started cutting its interest rates last year.

Next week, the ECB is set to lower its key interest rates for the fifth time, prompting fears that there will be even more savings rate reductions.

Daragh Cassidy, consumer expert with Bonkers.ie, said: “While this is generally good news for mortgage customers, the downside is that it leads to lower returns for savers.

“Since the start of the year, Bunq, Bank of Ireland, Raisin and N26 have all reduced their savings and deposit rates.

“So [yesterday’]s news from AIB isn’t surprising. But I welcome the move by AIB to reduce the minimum amount required to open a fixed-term account.

“The new €5,000 limit will make the account much more accessible to savers, even if the rate will now be slightly lower.”

Mr Cassidy added: “I’d really encourage anyone with savings to do something with them before rates fall further.

“There isn’t much time left as we’re likely to see more reductions over the coming months.

“By the end of the year the best savings rate on offer could be only 1.5%.

“On a more positive note, I’d expect AIB will announce further mortgage rate cuts very soon.”