What is the best to protect your cash deposits

ircoha

It looks to me that its time to diversify the little cash deposits I have so am wondering about the different levels of cover that exist for depositors
between
banks regulated here
banks regulated elsewhere: eg Rabo
building societies
credit unions
An Post.

EU rules will not allow the Gov step up to the plate for depositors when the bank failures start here so I want to spread the risk.
Thanks

stepbar

ircoha wrote: »

It looks to me that its time to diversify the little cash deposits I have so am wondering about the different levels of cover that exist for depositors
between
banks regulated here
banks regulated elsewhere: eg Rabo
building societies
credit unions
An Post.

This would be what you're looking for - http://www.financialregulator.ie/frame_main.asp?pg=/industry/in_bci_dps_intr.asp&nv=/industry/in_nav.asp

ircoha wrote: »

EU rules will not allow the Gov step up to the plate for depositors when the bank failures start here so I want to spread the risk.
Thanks

A bit armageddon TBH.....

Ogham

As explained in the link given above - Irish banks are covered by the Deposit Guarantee Scheme which is administered by the Financial Regulator.
Under the terms of this scheme, account holders will get 90pc of their deposits back up to a maximum of €20,000. If money is held in several different accounts in the same bank, the €20,000 compensation limit applies to the overall amount on deposit as opposed to each separate account.

Northern Rock is now guaranteed by the British government and so is an extremely safe haven for deposits.

In Ireland, deposits at An Post - are guaranteed by the Government

Rabobank are covered by a Dutch scheme, which guarantees 100pc compensation on the first €20,000 and 90pc of the next €20,000.

National Irish Bank is covered by the Danish compensation scheme -This guarantees payment of about €40,000 on deposits

Credit Unions - as far as I know no guarantee -

Think that covers them all?:)

ircoha

Thanks for the info.
I do thing people should spread the risk associated with holding cash in the current situation, if for nothing else but to have multiple points of access if there is a run on one bank as opposed to all of them.

ps: I presume the PostBank setup with an post comes under the 90% up to 20k rule for normal banks as opposed to the plain post office deposit.

marktsang

anyone know the story with Ulster bank???

thanks,
mark

KillerShamrock

This covers you if your bank goes tits up and not if your particular savings/investment does.Thats a risk you signed up to when you opened those particular accounts.

I really dont see any of the countrys big banks going the northern rock route they are too tight and cheap.
Like the 2 biggest banks in the country made in and around 1 .9 billion euro and 1.3 billion euro each in after tax profit between april 07 and 08.

Bank of ireland has been around for 200 years plus since 1783 and seen its fair share of turbulance in the market/economy i think the latest bit wont do too much damage.

The only thing i can see is the banks loosing some of their precious profits and having to tighten their already super tight belts. Or maybe a big International bank with a take over bid, or a merger between BOI and AIB the last being highly unlikely.

amacca

I was wondering something else about protecting cash deposits.

I know that if you have more than one account with the same bank it is the aggregate sum of all the deposits that count towards the max 20k compensation (or 90%)

What I was wondering though, (and I know this really is armageddon type stuff)

what would happen if say I had 3 deposits of 20k or more with 3 institutions (ie >20k with ebs, >20k with boi and >20k with aib) and all three operations went belly up.................could I claim 20k compensation for each account from the deposit protection scheme or would they aggregate all 3 accounts from the different institutions into one amount of 60k+ and just give me 20k in total even though all three banks went out of business.

in other works is it a max of 20K for each person who claims or a max of 20k per institution per person who claims - I couldnt figure this out from the link to the terms and conditions.

Again know its incredibly unlikely but just wondering what would happen.

boa-constrictor

stepbar wrote: »

A bit armageddon TBH.....

Trust me Stepbar - this is not as far fetched as it sounds. BOI/AIB might be around along time and have seen alot of turbulence - in my opinion very few banks have seen the likes of what is to yet to come. Irish people think that banks like AIB and BOI are rock solid just cos they make a couple of billon a year, but if one rogue trader can bankrupt Barings and bring AIB to its knees imagine what the downfall of say Fannie May or Freddie Mac could do. Foreign banks rate some companies higher than they rate Irish banks.

I rolled my deposit for another 6 months today at 5.25% with Rabobank. It was the best deal I could find. I usually only fix it for 3 months but 5.25% was too good to resist and the nice lady said I would only be penalised €65 (and the interest over the no. of days) if I break the deposit but that bit sounds too good to be true. Anyway I had another reason which may interest Ircoha. As Rabo is regulated by the Dutch Central Bank, the Dutch deposit protection scheme applies. As Ogham pointed out, this covers you for 100% of the first €20k and 90% of the next €20k = total €38k. The bonus is that if you have a joint account the cover is doubled.

Amacca - in relation to your query as to the cover provided by the depositors protection scheme - I believe that they do amalgamate your total deposits in all (maybe only Irish) banks and pay out only the first €20k.

I find that I always have to move the deposit as Irish Banks are only interested in giving you a good rate to get new money. A fairly high percentage of depositors don't shop around so they benefit by quoting crap rates at the end of the first rollover period

darkknight82

Hi ircoha,

I've been thinking of investing myself and came across a website as it was mentioned in the sunday times a while ago by Jill Kerby. www.irishdeposits.ie seem provide all the rates and info on deposits by all the irish banks. Quite informative if you just want to get an overview.

I think postbank are the only bank to provide a 100% guarantee as they're backed by the Irish government.

I would personally look at the banks rating and make an informed decision based on that. Also diversify your risk.

Hope that may be of assistance.

DK

BuffyBot

An Post are 100% state backed.

Postbank, however, isn't An Post - it's only a half owner - and is subject to the same regulations as all the other banks.

rinnin

Scary stuff. Heard on the radio yesterday some guy went into his bank and told the manager he was scared that he'd lose his savings & got him to personally guarantee 100% of the capital on his savings.
Do you think if we all did this it would stand up in court if the banks went tits up? Do you think this would be legally binding?
Interested to know what people think as I'm thinking of doing the same.

gurramok

And Ulster Bank and First Active are part of the same financial institution (RBS i think) which means that 20k limit is the total of all your accounts in both banks.

So, just dont have more than 10k in each

daveirl

This post has been deleted.

rinnin

May be a bit paranoid but just took all my € out of Anglo Irish and put it into BOi. Took a bit of a penalty as it was a 30 day notice account but will sleep a bit better tonight.

tech77

Christ.
I was about to start a thread about this very same thing after reading about the 20000 figure twice in the papers today.
Lo and behold there are others out there thinking the same thing

That guarantee that rinnin mentions sounds interesting.
So can anyone confirm- is it 20k max (aggregate) regardless of how many institutions you have deposits in?
Need to do a Bertie and buy myself a fcuking safe.

daveirl

This post has been deleted.

stepbar

daveirl wrote: »

This post has been deleted.

Not being funny, but I can't see how the likes of Anglo / INBS are getting any margin on the type of high interest deposit accounts (not regular savings) they're offering at the moment.

One must question what exactly is going on....

daveirl

This post has been deleted.

Cantab.

An Post's interest rates aren't too bad when you look at their DIRT-free products.

Talk of DIRT being charged at 40% after the emergency budget.

KerranJast

daveirl wrote: »

This post has been deleted.

Hmm I was about to about a 6% 1 year deposit account with them. Dunno what to do now.

TrapperChamonix

I have a related question about security of deposit with First Active.


I have an offset mortgage with 1st Active where by I have a mortgage of €250k and have a deposit of €50k. In calculating the interest the €50k is deducted from the €250k.

In the event of the bank failing (small chance) does that mean that I would loose my €50k but still owe the full €250k?

Russh

TrapperChamonix wrote: »

I have a related question about security of deposit with First Active.


I have an offset mortgage with 1st Active where by I have a mortgage of €250k and have a deposit of €50k. In calculating the interest the €50k is deducted from the €250k.

In the event of the bank failing (small chance) does that mean that I would loose my €50k but still owe the full €250k?

Good question....In general if you have a mortage with a banking establishment and you also have an amount of over 20k on deposit a/c with them...Will they offset your money in the deposit a/c against mortage monies due...?

jmayo

Someone asked earlier what is the story with Ulster Bank.
They are owned by RBS, so does UK regulations regarding guarantee of deposists apply, like dutch Rules apply to Rabobank and Danish rule seem to apply to NIB ?
Does the Ducth rules apply to ACC bank since owned by Rabo ?

Can someone clarify this for me.
I thought the 20k rule applied to all your deposits within the one institution and not all your deposits across Irish institutions ?

Also interested is there anyone out there at the moment buying bank shares?

BuffyBot

ACC stills seems to operate under the Irish regulatory authorities.

As for the bank shares question - it's probably better discussed in Investments & Markets

redroar1942

"Good question....In general if you have a mortage with a banking establishment and you also have an amount of over 20k on deposit a/c with them...Will they offset your money in the deposit a/c against mortage monies due...?"

No such luck if they go bust you lose anything over 20k, someone else will takeover your mortgage.

Northern Rock are 100% backed by the British government and offer 5% interest. I'd rather put it there then in An Post.

I honestly dont think there'll be a run on an Irish bank. The likes of joe duffy and newstalk in general sicken me with their scare mongering press.

unclebill98

jmayo wrote: »

Someone asked earlier what is the story with Ulster Bank.
They are owned by RBS, so does UK regulations regarding guarantee of deposists apply, like dutch Rules apply to Rabobank and Danish rule seem to apply to NIB ?
Does the Ducth rules apply to ACC bank since owned by Rabo ?

Can someone clarify this for me.
I thought the 20k rule applied to all your deposits within the one institution and not all your deposits across Irish institutions ?

Also interested is there anyone out there at the moment buying bank shares?

Ah another worried tread!!

UB are controlled under Irish Law.

also remember that the max you get back is 90% of your deposit to a max of 20k. So leaving 20k in your bank still means your only getting back 18k.


As for what happens if you loose your savings of 50k and still owe a 250k mortgage, you'll loose your savings and still owe the 250k.

So, the aul government should get off there arse and massively up the protection on peoples savings. The banks pay into that fund and tbh its not going to make a massive difference to the banks if they up it.

Can people not remember what happened to Northern Rock, people taken there money out just made the whole situation a lot worse!

Russh

redroar1942 wrote: »

No such luck if they go bust you lose anything over 20k, someone else will takeover your mortgage.

Absolute outrage...!....:mad:

rinnin

Brian Lenihan upped te deposit protection to €100k today.
Would have been nice to have done this a few weeks ago & before I moveall my Anglo Irish savings to the Post Office.:o
Oh well.

jmayo

unclebill98 wrote: »

Ah another worried tread!!

UB are controlled under Irish Law.

also remember that the max you get back is 90% of your deposit to a max of 20k. So leaving 20k in your bank still means your only getting back 18k.


As for what happens if you loose your savings of 50k and still owe a 250k mortgage, you'll loose your savings and still owe the 250k.

So, the aul government should get off there arse and massively up the protection on peoples savings. The banks pay into that fund and tbh its not going to make a massive difference to the banks if they up it.

Can people not remember what happened to Northern Rock, people taken there money out just made the whole situation a lot worse!

So would you be the one stalwart and keep your money in and trust that other people will see you right ?
I believe God looks after those that look after themselves and I would rather inconvience the bank's shareholders, the bank's employees, the economists, the government, than lose my hard earned savings. None of these people will give two s**** about me, I will just be another statistic, so in my ethos why the hell should I take the chances. Will I be rewarded for being a valued loyal customer ?
Yeah right :rolleyes: (example check out how O2 reward their loyal custmers)
Yes I do know that most of our banks, financial institutions are different from those in US, but there are still quesitons regarding the level of debt being carried and the danger that a few bad stories can rock the boat.

Anyway thanks for the confirmation info on UB. I wasn't sure if they fell under British jurisdiction or Irish, similar to NIB's situation.
Speaking of which they actually are offering ok deals on fixed term deposits.

Anyway I believe in the old adage about spreading the eggs about