Apart of EBS saving accounts with better AER, where would you put your money right now?
Stage of life dictates a lot. AVCs are out if you're retiring.
Not hard having €400k-€500k if a married couple have each received retirement lump sums, transferred the majority of a lifetime's saving and investment to more risk averse cash options, and perhaps came into an inheritance.
I keep repeating this, but some people don't get it. Higher return is also associated with some kind of higher risk, no matter how it is presented. I've spent over three decades in Swiss banking and I have yet to meet any of these guys who are willing to give you anything beyond the minimum they need to. So when someone is offering you more than the norm, you need to be on your guard, they are not doing it because they are nice guys and want to help you.
I've looked at Raisin in the past but not as a potential client. Of course by depositing cash in multiple institutions with different states providing the back up guarantee should reduce your default risk, but placing a single intermediary between you and those institutions may also adds another layer of risk. If you were putting a large amount on deposit or even an amount that is significant for you, then there are some points you'd want to be clear on:
My assumption (and one which I would confirm before depositing any money) is that they are a merely just a middleman. So that you are not giving your money to raisin who promise to deposit it in the bank for you and pass on the return, but that they merely link you up with the bank. You would be the bank's customer, not raisin acting as some kind of agent for you. There could obviously still be some residual risk if you have to transfer money through Raisin rather than directly to the destination bank itself, but I don't know whether that is how it is done or whether they just give you the IBAN for the destination account and you wire it directly.
Their website mentions the guarantee in the context that it would be amalgamated with other amounts you had on deposit at that institution. e.g. if you already have 50k on deposit with bank X in Germany and you put in 60k through Raisin into the same bank, you would be over the guarantee limit. So I would infer from that that my assumption above in relation to who "owns" the account is correct. If it were all under Raisin, then the guarantee would be virtually worthless as they'd likely have large amounts deposited in some institutions.
I'm not advocating for them. I only learned about them on another thread a few days ago and read their website and though it was an interesting concept. I mean with all the EU rules, it should be something that we can do easily. We shouldn't be restricted just to Irish banks
I don't know about fees. Those aren't mentioned. Maybe if you register with them you are told. Tax implications are on their website. At least information as regards withholding taxes. But I think the standard thing would be that you send them a residency certificate from Ireland and they don't deduct it. If they still deducted it, if there was a DTT then that would be deducted from your DIRT liability presumably anyway. I would imagine that within the EU, that they won't deduct it anyway.
(Of course, I was a bit ambiguous in my example above but in case I confuse anyone, the guarantee is not per country but per person per covered institution)
True, just offering an alternative suggestion.
Ok it make sense if you talking about retired people who doesn’t need to take risk.
BTW, in relation to Jim2007's point about the banks "giving you more than they need to" I just checked there and overnight interbank rates are up near 2% at the minute and 12 month interbank rates are about 3.3%. So the rates on offer are still less than wholesale rates (albeit for retail amounts).
Even if the Bank has a low credit rating, well if you keep below the 100k, the more relevant rating would be the sovereign rating rather than the institution rating. (Assuming everything is as stated). So your principal shouldn't be at (high) risk.
I don’t know and I’m not motivated to dig into it. But they claim to have AUM of €28b, now in AM terms that is chump change, but why do they have any at all? All I’m saying is be very careful and make sure you fully understand the legal implications of what you are signing up to.
The credit rating of a bank is an irrelevant measure for customers, it is just an indicator of the bank’s ability to raise funds in the market. The T1 ratio measure the banks ability to take a serious blow to its capital structure and still remain viable.
Back in 2007 Irish and British banks had very low single digit ratios where as the Swiss bank I worked for had one of 21. We to a hit of over $50b and survived, Irish banks were not capable of taking the hit. These days the situation is very different with the BIS, ECB & FED all requiring and monitoring much higher T1 ratios.
Ptsb actually have one of the best rates at the moment - 0.75% AER on 18 months fixed rate deposit.
Yes and 1% over 3 years,1.25% over 5 years.
33% of which goes to DIRT.
DIRT exempt?
Capital is expensive to set aside so I'd imagine most places don't set aside much more than is required. I never worked anywhere with a retail banking arm so I don't know about that side of things but was under the impression that more emphasis is being placed on the likes of NSFR and LCR the last few years. On the trading side of things, a spread would be implicitly priced into derivatives to take into account the cost.
Nowhere keeps 100% of liabilities as reserves. The reserves are to help the bank deal with an unexpected situation but would not cover everything in the event of a catastrophic meltdown of that institution. In which case the depositor is not guaranteed to get all their money back. The credit rating is still of some use to the consumer as a proxy (albeit not guaranteed to be 100% accurate) as to the overall financial health of the institution. It's sort of a cyclic argument to define it in terms of ability to raise on the markets.
(And the counterexample where the normal rating<->yield logic was broken anyway would be when US was downgraded a few years back and Treasury yields went down. Obviously that was sovereign debt so different things at play there and the reasons that occurred would not be relevant for commercial banks.)
There are peer to peer lending platforms giving out loans to Irish SMEs. Interest rates of 7% to 12%, but no Government backed bank deposit guarantees and your money is very definitely at risk.
That's a mistake by bonkers. PTSB Fixed Term deposit accounts are most definitely subject to DIRT: https://www.permanenttsb.ie/saving-and-investing/deposit-accounts/fixed-term-deposit-account/
Bonkers is mistake prone.
So let's compare State Savings 3 year bond (.33% no DIRT) with Ptsb's 3 year fixed rate account (1% minus DIRT @ 33% for a €10,000 deposit. Total interest = Ptsb €200 vs SS €100. Clear winner there.
I wouldn't be interested in fixing for longer than that at the moment, not to say others shouldn't.
Well, it is not insane. You know how much money has been saved during Covid? You would be insanely surprised
Only if over 65 or permanently incapacitated .
For the number of accounts, I recall a statement from the Central Bank a couple of years ago which said that there was 1,776 deposit accounts in Ireland with a balance of €1 million or more. I remember the number because it's a significant date in US history.
How many accounts have more than 500K? Your guess is as good as mine but it could be anything up to 10,000, especially in the aftermath of Covid when people spent far less on new cars and foreign holidays.
As to the total amount on deposit, as of June 2022, Irish deposit accounts amounted to more than 130 billion euros. Go to the link below and click on the first Table A.18 (opens a CSV file), the number is in the righthand column 'Total Deposits'...
https://www.centralbank.ie/statistics/data-and-analysis/credit-and-banking-statistics/private-household-credit-and-deposits
Bunq "Easy Savings Account" - 1.05% (before DIRT) - interest paid monthly. Yes you can get better rates via Raisin, but in terms of effort / risk / reward it's a good choice. Better rates than the Irish banks are offering, better app, instant access (also supports SEPA instant), IE IBAN, easy to setup, covered by the 100k bank guarantee etc.
https://www.bunq.com/benefits/massinterest
For those who have a mortgage however, you'll very likely get a better return than any savings a/c at the moment by overpaying it.
And that's over 65s with income below the 'annual exemption limit' which really is quite low.
https://www.revenue.ie/en/additional-incomes/dirt/who-is-exempt-from-dirt.aspx
I know. But for a family who have a couple working and like have 2-3 kids, mortgage for house. They would have 500k in cash?
unless we are talking about VPs, biz owners, or people who have eld kids who already make money themselves
I have used Raisin for years and all has gone well. Currently have deposits with 4 banks via Raisin.
Regarding your questions:
Raisin is an easy way to get a decent return for your deposits with a state deposit guarantee provided you keep deposits below 100k per bank.
EDIT: They've just announced a rate hike - now 1.31%
https://twitter.com/bunq/status/1610322127063851010?s=20&t=n6QbNs2mMAF3tlZZ66uX3g
Are Raisin even authorized to do deposit business here? Can't see it on their website.
Tax wise is the interest in the absence of Irish DIRT not assessed at the marginal rate?
Be wary folks
Well, asked somewhere else and some people opened saving accounts at 3% AER. Not bad neither. They're based in Germany.
Couldn't find anyone disappointed with Raisin yet.
That completely failed to answer my questions.
You have not addressed the questions at all...
First of all since they are a financial services platform claiming to provide "introductions" to their partner banks who are the ones taking the deposits, there should be no need for them to be authorised on the other hand they claim to have AUM.....
As for being based in Germany, it does not actually matter since the third party bank where you were placing your deposits is the one needing the guarantee, or does it?
Raisin are authorised by the Central Bank of Ireland as a credit institution that is authorised to carry out banking business in the State. The reason that Raisin arrived in Ireland long after other countries is it took years for the CBI to issue this authorisation.
Where did you see this?
