Is this a sensible strategy: deposits with EBS, PTSB, KBC & UB?

B

Baba O'Riley

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I've got deposits with EBS, PTSB, KBC, UB.

I had to spread everything to be covered by the guarantee.

I have not opened any foreign accounts as i wanted to minimse on complications and/or extra fees associated, and i'm lazy.


Are there many people like me using Irish Institutions for short term deposts? maximum term i have is 14 months, interest paid annually.

AM I MAD?? if Ireland (or the euro) was to go wallop tomorrow would i be up a creek?

any opinions/suggestions apreciated.
 
There are plenty of people like you. One would think that only a small minority of the population of foreign bank accounts outside of the ROI.

If the EUR goes, then your deposit will get converted into a new currency and most likely suffer devaluation. Plenty of threads on that here.
 
Thanks Ciaran. I've read the threads alright, good stuff in there. I've read so much that i went from thinking i should move everything out of Ireland to now thinking that the gains arent worth the hassle. The foreign deposit rates (bar AUS$) don't seem attractive enough to warrant paying charges/conversion rates and whatever else to set them up and/or to move the money around in the future. I think i'll sit with short term, accessable deposits, in Irish institutions....gulp
 
Baba, I'm exactly like you. And there are thousands more. Nobody has yet lost any money from Irish banks. Further, your money has worked harder for you in terms of interest than it would have elsewhere.
 
Uncertainty is a fact of life. It is always with us. It will never go away all we will do is move onto worrying about something else in the future.

Many of us fail to understand investing and so either worry constantly or switch off and pretend there is nothing to think about.

The antidote to uncertainty is not speculation about the future it is diversification. Not having all your eggs in one basket.

But this doesn't mean open a few bank accounts - job done.

Over the long term cash deposits are a poor investment due to loss of purchasing power. After tax and inflation bank deposits typically lose money in real terms. They offer short term stability and long term lack of security.

The prudent investor keeps their savings in several different banks with different tax payers underwriting the banking system ( ie not all Irish banks) but there is nothing to be gained from speculating on foreign currencies - if your liabilities are in Euros keep your savings in Euros.

The balance of your capital that is not required for immediate planned expenditure or an emergency fund should be invested according to your willingness, ability and need to take investment risk.

The question therefore should not be am I mad keeping all my savings in Irish banks ? but rather am I mad keeping all my savings in cash? to which the answer may well be yes especially if we enter a period of high inflation.
 
You also have your deposits in 2 irish banks, not 4. KBC and UB are not Irish owned
 
Bobby1 said:
You also have your deposits in 2 irish banks, not 4. KBC and UB are not Irish owned
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Agreed Bobby, I suppose what i mean is that i have the accounts in Euro's and in companies based in Ireland rather than Germany or in Canadian $$ or something
 
If Ireland gets kicked out of the euro, all euro savings in Irish banks will be converted to an Punt Nua overnight and your savings will be wiped out.

Get some or all of that cash offshore as soon as possible.

As for it being a hassle, much of it you can probably do on-line or through the post. The only hassle is putting a stamp on an envelope

Good list of offshore accounts here:
http://moneyfacts.co.uk/compare/offshore/euro/
 
Marc said:
The question therefore should not be am I mad keeping all my savings in Irish banks ? but rather am I mad keeping all my savings in cash? to which the answer may well be yes especially if we enter a period of high inflation.
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Very good point.

Also, as you state, it is important to remember that the currency you spend your money in is typically the safest one to save it in e.g. you're playing with fire putting your money into Canadian Dollars unless you're planning to move there for good!
 
celebtastic said:
If Ireland gets kicked out of the euro, all euro savings in Irish banks will be converted to an Punt Nua overnight and your savings will be wiped out.
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Simply wrong! The Irish government could in theory is a Punt Nua, but without a constitutional referendum, they could not convert an currency.... go study the EU treaties!
 
Jim2007 said:
Simply wrong! The Irish government could in theory is a Punt Nua, but without a constitutional referendum, they could not convert an currency.... go study the EU treaties!
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Simply wrong

EU treaties and constitutional referenda would mean little if Ireland were forced out of the euro.
 
cashier said:
So Jim2007, does this mean if in the unlikely event Ireland will leave the Euro, Irish people would have plenty of time to move cash savings and they don't have to to go to the hassle and stress of moving it for now?
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No
 
Anyway to get back to the OP's point, there is a really good post here from Brendan on the compelling reasons why you might want to keep your money offshore (in this case in a Euro account in Germany):
http://www.askaboutmoney.com/showpost.php?p=1223570&postcount=5

I see very little risk in transferring your money from an Irish bank account to a German bank account. If the euro doesn't break up, you will be no worse off. If the euro does break up, you will be better off.
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Wise words
 
Jim2007 said:
Just because you say it does not make it so! Go away and come back with some legal basis and then we can have a discussion!
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And again simply wrong !

EU treaties and constitutional referenda would mean little if Ireland were forced out of the euro.
 
cashier said:
So Jim2007, does this mean if in the unlikely event Ireland will leave the Euro, Irish people would have plenty of time to move cash savings and they don't have to to go to the hassle and stress of moving it for now?
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What it means is that the kind of over night horror pedaled by some people has not basis in hard facts, which are what you should deal in when managing your finances.

Any withdrawal from the Euro will be a drawn out process, with many twists and turns along the way. Now the Euro can probably survive the exit of Greece, but anyone else exiting would bring the whole apple card tumbling down. Which in reality means that it does not matter where you have your Euros if it blows!

People are fooling themselves if they think that moving their Euros to Germany will protect them... it will not. The amount of foreign deposits with German banks is at such a level that it would cause serious economic problems in German if they were to convert them to the Neu Mark on the break up of the Euro and I can't imagine the Germans going along with that!

And when it comes down to the actual banks themselves, people should realize that the German banks they are depositing their money with are less well capitalized than the Irish banks and that German can afford to let a few banks go to the wall!

For me the bottom line is that shipping Euros around may make you feel good, but I very much doubt that it is in reality do much to reduce your exposure!
 
Jim2007 said:
For me the bottom line is that shipping Euros around may make you feel good, but I very much doubt that it is in reality do much to reduce your exposure!
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Food for thought.

Thank you for your response Jim 2007.

So, if not Euros, what currency do you think we should be putting our life savings in?

Or should we just keep all our funds in Irish bank accounts and watch as they evaporate, if the eurozone disintegrates as looks increasingly likely?

EU treaties and constitutional referenda would mean little if Ireland were forced out of the euro.

Jim - you may want to read this excellent post from Brendan on what to do if Ireland is forced out of the Euro:
http://www.askaboutmoney.com/showthread.php?t=163133
 
Quote from post above-'then your deposit will get converted into a new currency and most likely suffer devaluation'
Can anybody give any idea roughly how much this devaluation would be?
Would it be extreme that €100 would end up being €5 or is this totally extreme?Thanks
 
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