Why is your savings only guaranteed up to 100K per account?

Hollister11

Why is your savings only guaranteed up to 100K per bank?

If your a wealthy individual, that means you can only have 500/600K saved in different banks across the country. Where are you meant to keep the rest of money?

Surely you can't be expected in invest all of it in property, businesses and the stock market.

amcalester

Not many people will have more than 100k in cash.

It's as simple as that.

knipex

Hollister11 wrote: »

Why is your savings only guaranteed up to 100K per bank?

If your a wealthy individual, that means you can only have 500/600K saved in different banks across the country. Where are you meant to keep the rest of money?

Surely you can't be expected in invest all of it in property, businesses and the stock market.

Short answer, its the minimum the state has to do to keep confidence in the banking system and limits their potential liability.

fleet

If you have €100,000 in a savings account then you're doing it wrong.

That's a serious chunk of wonga and you ought to have it invested, or doing something to beat inflation. Otherwise it's just losing value daily.

Only exception is saving for a deposit for a mansion.

coylemj

To answer the question in the thread title, the policy is to cover the savings of a high percentage of the population and a threshold of 100K probably covers 98% or so. There is no valid reason why every penny of every account needs to be guaranteed once the vast majority of the people with bank accounts are fully covered.

If you want a 100% guarantee for all of your money from the Government, buy Prize Bonds and/or gilts.

dennyk

As others have noted, there is zero reason to ever have even €100,000 in a savings account for any period of time, never mind €500,000+. You would literally be losing thousands of euros a year to inflation alone in that case, and that's not even counting the tens of thousands in potential opportunity costs from not having your funds in a better investment vehicle.

The approach I prefer is to keep 1-2 months of expenses as a current account buffer, 3-6 months of expenses in a savings account as an emergency fund, and the rest goes into my tax-deferred retirement accounts (401k/IRA in the US, an occupational pension or PRSA here), then once those are maxed out for the year, anything else left over goes into a taxable brokerage account, spread across several different low-expense-ratio index funds. Mine's a mutual fund account with Vanguard which I opened when I lived in the US, but in Ireland you can open an account with DEGIRO or Davy or some other brokerage and invest in similar index funds via ETFs (sometimes even Vanguard's funds themselves).

If you truly have six figures of cash sitting around and you don't feel comfortable handling your own investment strategies, it would be a very good idea to hire a financial adviser. I'd suggest finding a reputable independent adviser who works on an hourly fee basis, not one who works on commission (and definitely not the one at your bank!), as fee-based advisers are more likely to give you appropriate advice for you and your situation rather than just trying to steer you towards investing in high-expense funds that earn them more commission and/or fulfill their employer's sales quotas.

Nody

Hollister11 wrote: »

Why is your savings only guaranteed up to 100K per bank?

If your a wealthy individual, that means you can only have 500/600K saved in different banks across the country. Where are you meant to keep the rest of money?

Surely you can't be expected in invest all of it in property, businesses and the stock market.

The point being if you're a wealthy individual you can afford to lose some of it in cash the bank needs recapitalization and to be honest if you got in excess of 100k in cash on your account you also can afford to get good enough professional advice for it to be a non issue.