Redundancy Lump Sum advice

[Freddie59]

Hello.

First time posting - so I hope I'm in the right forum. I was referred here by the good folks at The Property Pin, who saved us 50% on the price of a house a few years ago.

Mortgage is paid, kids are reared. €100k remains from redundancy lump sum. Naturally we are extremely nervous about the banks, given the current situation. We understand about the €100k deposit guarantee, but if there's an implosion that might come to nothing.

Don't know what to do with the sum to secure it - or is it even possible to do so?

Rabo Direct maybe?

Thanks in advance.

regards,

Freddie.

 

[Lightning]

All depends on what you mean by "secure".

Below 100k risk is down to the (1) risk that the bank will go belly up and also (2) the ability of whoever operates the relevant deposit guarantee to pay up.

RaboBank have the highest credit rating of any Irish consumer deposit taking bank. Nationwide UK (Ireland) have an A rated long term credit rating.

The FSA / UK Government guarantee Nationwide UK (Ireland) and Leeds Building Society (Ireland) deposits under aprox. 100k. The UK government is AAA rated.

 

[Freddie59]

Thanks for the pointers Ciaran. I suppose by secure I mean to try to limit the exposure to risk.

 

[Gerry Canning]

Freddie 59,

I understand all Bank deposits up to k100 are covered by the State, so unless State goes belly up = all are safe.
That being so = shop around for the best rate.

 

[Lightning]

I understand all Bank deposits up to k100 are covered by the State, so unless State goes belly up = all are safe.

There are several different deposit protection schemes. It all depends on where the bank is regulated.

Irish regulated banks are protected by the Irish Deposit Guarantee Scheme. This is not a state guaranteed scheme. Although, it is operated by the Central Bank of Ireland. If BoI, AIB, Ulster Bank or PTSB goes belly up, deposits up to 100,000 EUR will be compensated first by the bank as far as possible and then by the Irish Deposit Guarantee Scheme. The ability of the Irish Deposit Guarantee Scheme to pay compensation is limited to the amount of money it has in the fund the compensate. If a big Irish bank went belly up, the kitty may not have enough money to compensate. However, the state might or might not intervene to compensate but the state is not under an obligation to do so.

When IBRC went into liquidation, the Irish Deposit Guarantee Scheme compensated almost all deposits up to 100,000 EUR. The Irish government compensated most, but not all, deposits above 100,000 EUR from the, now largely gone, Eligible Liabilities Guarantee. A small number of depositors lost money as they were not covered by either scheme.