FAQ Deposit Guarantee Schemes

Brendan Burgess

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The following Irish banks and building societies are covered by the Irish Deposit Guarantee Scheme:

N.B. It appears that the government is guaranteeing 100% of all deposits in Irish banks up to €100k, so this thread will need to be updated.

AIB
Bank of Ireland
Ulster Bank
First Active
EBS
permanent tsb
Irish Nationwide
Anglo Irish Bank
PostBank
ACC Bank ( Although owned by Rabo , I don't think it's covered by the Dutch scheme. There is nothing on the website and no simple way of contacting them by email)



This "guarantees" 90% of your deposit up to a maximum payout of €20,000.

So if you have €20,000 on deposit, you will get back €18,000
If you have €100,000 on deposit, you will get back €20,000

It is not clear to me who is providing this guarantee. This is discussed in this thread

Other banks operating in the Irish market have at least as good a deposit guarantee scheme.

Rabobank - 100% of the first €20k, 90% of the next €20k. Doubled for joint account holders. - Dutch Scheme.



National Irish Bank - €40,000 from Danish scheme
Halifax/ Bank of Scotland - UK Scheme - 90% of c.€50,000 (£33,000) discussion
Investec - UK Scheme - 90% of c.€50,000 (£33,000)




Brendan
 
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Re: Credit Ratings of Irish deposit takers

Posted in another thread by VJOC

Q) Where to put your NR withdrawal?

A1) Straight back into NR. It's the safest bank in the country and it pay's you the best demand rate at 4.5%. Why? No other bank offer's an unlimited deposit guarantee underwritten by the Bank of England (BoE)!!!

A2) Okay, so you don't trust the BoE. Then the next best bet is An Post. Your deposit is state guaranteed. Safe as "houses" or is it? You decide! The catch is the best rate on offer is only 3.0% on a 90 day notice account. Savings Certs & Bonds offer slighter better rates (DIRT free) if your prepared to lock your money up for a number of years. (Note: This only applies to AnPost and not their new joint venture Postbank)

A3) Okay, so now you don't trust the Irish State. Next best bet is NIB. Your deposit is underwritten by the Danish Deposit Guarantee scheme. This guarantees 100% of Kr300k, or €40k approx. NIB's regular saver demand account pays 4.5% (ECB + 0.5%) on lump sums up to €50k.

A4) Okay, so now you don't trust the Danish. Next best bet is Rabobank. Your deposit is underwritten by the Dutch Deposit Guarantee scheme. First €20k guaranteed 100%, Next €20k guaranteed 90%, After €40k your own your own. To summarise, a maximum deposit of €40k is guaranteed up to €38k. The demand account pays 5% on the first €10k and 3.75% on any balance thereafter.

A5) Don't like the Dutch, then you could always trust an Irish Bank, where your deposit is 90% guaranteed up to a maximum of €20k. To summarise, a maximum deposit of €22.2k is guaranteed up to €20k. I won't even mention the miserable interest rates. If you think their safe then read this article.

A6) Finally there is the cash under then matress option. Zero interest and zero guarantees. So unless you live in a fire station or have an armed security guard, I'd give this one a miss.

So there you have it! I'm leaving my cash where it is, in Northern Rock, with €40k in NIB & €20k in Rabobank, just in case it takes a few days to withdraw cash from NR. You get the best interest rates in the land and 100% capital guaranteed.
 
Re: Credit Ratings of Irish deposit takers

Deposit insurance - list of guarantee schemes:
[broken link removed]



Note1: all the schemes I've looked at (that go into detail) indicate that the schemes are per person, not per account. Joint accounts seem to be split.



First Active are owned by Royal Bank of Scotland, so I presume are covered by the UK depositors scheme?
Note3: This is a presumption! ( Brendan's note: I dont' think so. I think First Active is a separate bank in Ireland and not a branch. The same with Ulster Bank)

ACC bank is owned by Rabobank, so I presume are covered by the Dutch depositors scheme?
Note4: This is also a presumption! (Again - I assume you are wrong)



Investec is dual listed on the UK and South African stock exchanges.
It is a member of the FSA scheme in the UK and the scheme in Ireland according to this:
[broken link removed]
So I presume Irish rules apply.
 
Are savings in Irish Credit Unions guaranteed?


Savings in credit unions are not guaranteed. If a credit union affiliated to the ILCU gets into trouble there is a protection fund to help out but important to note it may bail out customers. Note the word 'may' - certainly not a guarantee.

Many people are under the impression credit union savings are covered by guarantees e.g. very safe. Not true and people are not awakening to these facts.

The members of the credit unions which are not members of The Irish League have no protection.

Some Credit Unions have misleadingly claimed that their deposits are "insured". They are not insured against the collapse of the credit union. In most cases, there is life insurance. If the shareholder dies, the estate gets twice the money back.
 
What about An Post?

The following are state guaranteed:
post-office savings bank
post-office saving bonds
post-office saving certificates

Prize Bonds

[broken link removed] is a separate company owned by Fortis. It is not covered by the State Guarantee.
 
If I have two accounts in the one bank, do I get two guarantees of €20,000?

No.



If an account is in joint names, do we get two guarantees of €20,000

Yes. ( I think so. )

If I have accounts in two different banks, are there two separate guarantees?

yes.


From the Financial Regulator's [broken link removed]:

Limits on Compensation
The maximum amount payable to any depositor is 90 per cent. of the aggregate deposits held by that depositor subject to a maximum compensation payment of €20,000. Thus, a depositor with a deposit account totalling €5,000 would receive compensation of €4,500 while a depositor with deposits of €22,222 or more would receive the maximum compensation of €20,000.

Multiple and Joint Accounts
All balances held in the depositor's name (including balances held in a joint account) together with any interest due will be aggregated for the purpose of calculating the funds owed to the depositor by the institution. Joint account balances will be apportioned equally between each account holder for this purpose and aggregated with any other balances held by that account holder
 
Anyone with a bit of time on their hands?

I am very busy and would love if someone could write answers to the above questions and other questions which have not been asked. Ideall with links to the definitive source of the information.

Thanks

Brendan
 
If I have a loan of €100,000 and €30,000 on deposit, are they netted off against each other?


What about an off-set mortgage?

See separate thread here.

From the Financial Regulator's website:


I have no idea what the phrase normal circumstances means.
 

I asked the regulator for an answer about this when the other thread came up and am still waiting and so I asked a lawyer for one of the big law firms who deals in financial law. Apparently it is not straight forward so I will try and summerise as best I can. He is sending me on an article later on the topic so I will post it when I get it.

The situation as I understand it is that banks have the right under common law for automatic set-off for current accounts only i.e. if you have two current accounts with the same banking group, they can be set-off against each other. They cannot off-set a credit balance in a deposit account against a debit balance in a current account or a loan account under common law. However, there is nothing to stop banks entering into a contract with customers that allows them to offset all accounts. It is unlikely that any small individual depositor has signed up to this. Therefore, it is unlikely that you will lose all your savings if you have a deposit and a mortgage with the same bank. The bank cannot turn around and offset a deposit account of say €20,000 and a loan account of say €100,000 and tell you that you are you not getting your savings back and you still owe them €80,000.

I know this probably doesn't make sense but it did when he explained it!! I will post the article when I get it.

Here is the link to the article. Its the last one on set-off
 
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Listening to the Joe Duffy Show just now and there again total misleading information given out regarding Credit Union savings protection. A gentleman named Gilroy who identified himself from Mitchelstown Credit Union stated '' credit union members are insured up to €12,700.'' Joe Duffy made him repeat this and Mr. Gilroy repeated and went on to state about shares doubled and loan wiped out. Gosh, imagine this misinformation belted out on national airwaves.
 
I rang my own Credit Union today (ESB Credit Union) and I was given the same guaranteed amount as €12,700. The situation about your shares doubling and your loan wiped out only applies in the event of your demise.
 
divadsnilloc said:
I rang my own Credit Union today (ESB Credit Union) and I was given the same guaranteed amount as €12,700. The situation about your shares doubling and your loan wiped out only applies in the event of your demise.
Click to expand...
Why doesn't [broken link removed] mention this €12.7K guarantee if it actually exists?
 
ClubMan said:
Why doesn't [broken link removed] mention this €12.7K guarantee if it actually exists?
Click to expand...

Good Question.

From Indo 15th July

Should the worst happen, the savings of individual credit union members "may be" protected up to a maximum of €12,700, according to an ILCU spokesman.
Click to expand...

Full article here
 
Does anybody know if a Bank Draft is still valid if the bank has gone bust. Is it backed up by the central bank.
 
No - a bank draft is simply a cheque written by a bank. The Central Bank has no involvement.

Presumably the person who paid you with the bank draft would still owe you the money.

Brendan
 
Position re Joint Accounts is really confusing. Rang Rabo today and was assured that the amount guaranteed is doubled in the case of a joint account. However, other banks didn't seem to verify this.

The whole situation is scary . In an effort to spread savings into smaller and safer amounts, I just opened a Halifax account last week and now have to worry about their safety! Is under the matress the best place????
 
Yes. I think that under the mattress is by far the safest.

By the way, what is your address?

Brendan

P.s. which mattress?
 
I have just listened to that Joe Duffy show (purely for research purposes!) and it was stated that the "guaranteed" €12,700 is only available up to age 55.

Marion
 
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