How relevant is the 100k guarantee

[coolaboola12]

I can just move some over to bunq I suppose

 

[daheff]

I agree. Other than in extreme situations where someone has sold a business and has a huge amount of cash and might prefer a money market fund or similar, I wouldn’t be overly worried. The Irish State isn’t bailing-in depositors. And if they were, I’d argue that we’d have bigger problems.

this is an interesting point - state bailing in depositors. Cyprus explicitly did it when they had their crash (apparently being pushed to do so by ECB).

Irish state did not explicitly bail in depositors, but it did add sneaky bail-in type tax to pension funds for a number of years. If worst came to worst and we faced another crash, I would expect that the state would bail in depositors. That line has now been crossed in the EU and the spin given would be why should Ireland be better than Cyprus?

So while the 100k bank guarantee is relevant, my main worry (if I had that much cash) would be a bail-in scenario if another banking crash happened. Personally I think the banks are in much better position now than back in '08. the fact they are slow to increase mortgage rates (and are offsetting the cost vs deposits) seems to me that they are trying to manage rate rises a lot to minimise defaults.

 

[coolaboola12]

What does bail in deposits mean

 

[podgerodge]

You mean via raisin ?

Well yes, but I was more talking about Advanzia which is dealing direct with a bank, like Bunq. (I have done Advanzia and Bunq).

 

[podgerodge]

What does bail in deposits mean

In my basic understanding, taking some of your deposits off you to save the bank.

 

[coolaboola12]

Well yes, but I was more talking about Advanzia which is dealing direct with a bank, like Bunq. (I have done Advanzia and Bunq).

Never heard of advanzia

 

[Sarenco]

EU Deposit Guarantees

There is no EU Deposit Guarantee - the Germans wouldn’t wear it.

All deposit guarantees are national schemes, with reserves covering a very small fraction of covered deposits.

 

[Sue Ellen]

Interesting so I'm back to multiple current accounts, which clubman gave out to me about

Why would you be opening current accounts (most likely paying zero interest), rather than savings accounts, in different banks for different €100k tranches of cash? In fact, unless you're about to buy a house or some other large high value item, why would you have multiples of €100k to hand rather than invested elsewhere for better returns that are not getting outpaced by inflation?

I'm with @ClubMan on this. As he says why would you have multiple current accounts where you may pay fees and probably not earning interest. Its probably unnecessary but its also safer to have non-day-to-day funds on time delay release in case your accounts are scammed or hacked or whatever

 

[podgerodge]

That is pretty strange advice in a case where there are EU regulated banks, covered by EU Deposit Guarantees, offering c.3% on deposits, which could net you c.€3k over a year after Dirt (compared to c.€100 with EBS!) (I'm not getting into alternative investments, just talking about deposits).

There is no EU Deposit Guarantee - the Germans wouldn’t wear it.

All deposit guarantees are national schemes, with reserves covering a very small fraction of covered deposits.

I said "EU regulated bankS, covered by EU Deposit GuaranteeS". Meaning, deposit guarantee schemeS in EU countries. You referred to "no EU Deposit Guarantee (no S) - singular. Sorry if not clear.

 

[coolaboola12]

There is no EU Deposit Guarantee - the Germans wouldn’t wear it.

All deposit guarantees are national schemes, with reserves covering a very small fraction of covered deposits.

So what's the point of it then

 

[coolaboola12]

I'm with @ClubMan on this. As he says why would you have multiple current accounts where you may pay fees and probably not earning interest. Its probably unnecessary but its also safer to have non-day-to-day funds on time delay release in case your accounts are scammed or hacked or whatever

So what would you do with over 100k cash

 

[Sarenco]

I said "EU regulated bankS, covered by EU Deposit GuaranteeS".

Ok, there are no EU deposit guaranteeS!

Just national schemes.

 

[podgerodge]

Ok, there are no EU deposit guaranteeS!

Just national schemes.

Jesús man! I meant EU deposit guarantee schemes, and you know it!

 

[Sarenco]

Jesús man! I meant EU deposit guarantee schemes, and you know it!

I’m simply making the point that there is/are no EU deposit guarantee scheme(s).

If you place money on deposit with a Latvian bank, you are solely reliant on the Latvian DGS, whose reserves only cover a small fraction of covered deposits.

 

[coolaboola12]

It's beginning to sound like all these guarantees are a waste of time

 

[NoRegretsCoyote]

There is no EU Deposit Guarantee - the Germans wouldn’t wear it.

Yea but there is an EU resolution fund with €64bn in it.

 

[Sue Ellen]

So what would you do with over 100k cash

Possibly pick something from here

 

[podgerodge]

I’m simply making the point that there is/are no EU deposit guarantee scheme(s).

If you place money on deposit with a Latvian bank, you are solely reliant on the Latvian DGS, whose reserves only cover a small fraction of covered deposits.

You are being pedantic and interpreting my phrasing in a way that most would not. There are lots of EU deposit guarantee schemes. One in every country. Phrasing it that way is quite common, as a quick google will show you. Here's one for you from the European Banking Authority. Maybe you should correct them

 

[podgerodge]

Never heard of advanzia

Luxembourg bank. There is a thread on here about it. Covered by the Luxembourg Deposit Guarantee Scheme (one of the EU Deposit Guarantee Schemes )

 

[Sarenco]

You are being pedantic

I am, but I’m also making a point.

DGS are national schemes; the ECB won’t come to the rescue of depositors in a Latvian bank.