Irish households held almost €175 billion in cash deposits, earning little or no interest, in June.Central Bank figures show the stock of household deposits rose by €9 billion (5.4 per cent) to €174.9 billion in the first six months of 2026.Ireland has a relatively high proportion of savings in overnight or current accounts which offer interest rates of between zero and 1 per cent, significantly below the rate of inflation. This means the value of the money is shrinking.Minister for Finance Simon Harris is planning to set up a new State-sponsored savings scheme to encourage households to invest in higher-yielding assets. The scheme, which is set to be announced later this year, is expected to carry a flat rate of annual tax.The Government is understood to have been looking at the UK and Swedish models. The latter carries a rate of tax linked to the yield on Swedish government bonds.Currently, investors in exchange-traded funds (ETFs) and other funds pay an exit tax of 38 per cent, which critics say deters investment. Harris said the aim of the investment account scheme would be to incentivise savers here to move some of the money held on deposit into capital market investments.The Irish plan comes amid a push by the European Commission for EU member states to adopt tax-friendly models to encourage individuals to invest.The Central Bank data indicated lending to households increased by €5.9 billion, or 5.4 per cent, in the year to end of June. Loans for house purchase were the main driver, coming in at €5.2 billion in the period.Colm Laird, banking sector lead at audit, tax and consulting firm RSM Ireland, said: “Households continue to build up their cash savings, whilst mortgage lending remains relatively subdued.“Generally, Irish households are feeling uncertain about their finances, with the recent increase in oil prices suggesting that fuel and energy costs might rise again this autumn and October’s budget expected to signal a squeeze on the growth of public spending,” he said. “Although the data shows that people have never been richer, they don’t feel that way,” Laird said.“Nervousness about the cost of living means that many feel happier building a savings buffer and holding back from borrowing or big-ticket purchases,” he added.