How relevant is the 100k guarantee

C

coolaboola12

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Is it really necessary to have only 100k on deposit with a pillar bank like BOI and AIB and move the rest somewhere else due to the bank guarantee only covering 100k

I mean what's the point in opening another account with say ptsb and paying current account fees on it just cos you have 100k on deposit with your main bank

What is the real risk of losing any money considering no deposits were lost in 2008? And if there is a financial crisis then all banks would be falling apart at the same time anyway

Is it really with opening multiple current accounts ?
 
coolaboola12 said:
I mean what's the point in opening another account with say ptsb and paying current account fees on it just cos you have 100k on deposit with your main bank
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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?
 
ClubMan said:
Why would you be opening current accounts (most likely paying zero interest) 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?
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Where can I put it? I'm maxed out on pension with equities
 
coolaboola12 said:
But it's a simple question, what beats inflation except equities ?
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A question that you never asked.
Other investment options are available that may beat inflation and will almost certainly beat deposits over time.
As I said, lots of useful threads about such matters already.
 
ClubMan said:
A question that you never asked.
Other investment options are available that may beat inflation and will almost certainly beat deposits over time.
As I said, lots of useful threads about such matters already.
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You have a nasty tone , I'm only asking a question
 
I think the chances of the State ever allowing BoI or AIB fail are pretty close to zero.

If they did the economic fallout would be absolutely catastrophic.

So, personally, I wouldn’t sweat about holding deposits in one of the pillar banks over and above the guarantee limit.
 
Sarenco said:
I think the chances of the State ever allowing BoI or AIB fail are pretty close to zero.

If they did the economic fallout would be absolutely catastrophic.

So, personally, I wouldn’t sweat about holding deposits in one of the pillar banks over and above the guarantee limit.
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Thank you for your opinion
 
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.
 
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Chiming in here. I have 150K and asked a financial advisor what to do with it in the context of other work he was doing for me and said its too small to invest and stick it in EBS....???
 
Sarenco said:
I think the chances of the State ever allowing BoI or AIB fail are pretty close to zero.

If they did the economic fallout would be absolutely catastrophic.

So, personally, I wouldn’t sweat about holding deposits in one of the pillar banks over and above the guarantee limit.
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What makes you think the State would be given any choice?

Irish financial institutions are co-regulated between the CBI and the ECB, but under EU law the ECB supervises in Ireland what are termed the ‘significant institutions’, i.e. Allied Irish Banks, Bank of Ireland Permanent TSB, and Ulster Bank. It is this supervision at the European level that significantly decreases the chance of a bank failing.

ECB are not particularly concerned with depositors but rather that the failure of e.g. an Irish bank would not lead to contagion with other European financial institutions. Depositors are protected by the DGS, and a prudent depositor should avail of it, rather than on speculation that the State would not allow a bank to fail.

coolaboola12 said:
Is it really necessary to have only 100k on deposit with a pillar bank like BOI and AIB and move the rest somewhere else due to the bank guarantee only covering 100k

I mean what's the point in opening another account with say ptsb and paying current account fees on it just cos you have 100k on deposit with your main bank

What is the real risk of losing any money considering no deposits were lost in 2008? And if there is a financial crisis then all banks would be falling apart at the same time anyway

Is it really with opening multiple current accounts ?
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The Deposit Guarantee Scheme is separate and protects deposits in the ‘covered institutions’. The DGS has been invoked 3 (4?) times to compensate depositors in Ireland. News | Deposit Guarantee Scheme . It' your money but I think having deposits above the 100k threshold in a covered institution is poor risk assessment.
 
PMU said:
What makes you think the State would be given any choice?

Irish financial institutions are co-regulated between the CBI and the ECB, but under EU law the ECB supervises in Ireland what are termed the ‘significant institutions’, i.e. Allied Irish Banks, Bank of Ireland Permanent TSB, and Ulster Bank. It is this supervision at the European level that significantly decreases the chance of a bank failing.

ECB are not particularly concerned with depositors but rather that the failure of e.g. an Irish bank would not lead to contagion with other European financial institutions. Depositors are protected by the DGS, and a prudent depositor should avail of it, rather than on speculation that the State would not allow a bank to fail.


The Deposit Guarantee Scheme is separate and protects deposits in the ‘covered institutions’. The DGS has been invoked 3 (4?) times to compensate depositors in Ireland. News | Deposit Guarantee Scheme . It' your money but I think having deposits above the 100k threshold in a covered institution is poor risk assessment.
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Interesting so I'm back to multiple current accounts, which clubman gave out to me about
 
@PMU

I am aware of all that.

I still think the chances of the State allowing one of the two pillar banks to fail is close to zero.
PMU said:
The DGS has been invoked 3 (4?) times to compensate depositors in Ireland.
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I would emphasise that my comments were limited to the two pillar banks.

I certainly wouldn’t hold more than the guaranteed amount in any credit union.
 
With the straight Reserves at an average of 16% of ALL assets (significantly higher than Banks risk adjusted ratio) I would happily hold more than €100k if I had it.

From Central Bank:
  • Reserves - average sector total realised reserves as a percentage of total assets increased marginally to 16.1% at 30 September 2022, with all credit unions reporting regulatory reserves above the required regulatory minimum of 10% of assets.
Why the ratio is 10% at twice or three times the Banks ratio only God and the Central Bank know that.
 
NoRegretsCoyote said:
AIB and BoI are supervised at EU level and any resolution would be largely decided in Brussels and Frankfurt, not Merrion st.
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Well, I think that would change if there was even a remote possibility of one of the two pillar banks failing.

The State simply couldn’t allow that to happen - it would result in absolute chaos.

And in any event the DGS wouldn’t have sufficient assets to cover all guaranteed deposits in that scenario.
 
ThisisMax said:
Chiming in here. I have 150K and asked a financial advisor what to do with it in the context of other work he was doing for me and said its too small to invest and stick it in EBS....???
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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).
 
podgerodge said:
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).
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You mean via raisin ?
 
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