If the euro goes down because of devaluation will irish deposits in Rabo be devalued?

M

mmquinn

Guest
What to do???

I am retired, living in Cork and aged 66. I have 100K in Post Office Saving Certs, 30K in a BoI managed fund and 17K in a Deposit a/c and no other assets except a mortage-free house.
I am seriously worried about future and safety of my funds esp in case of potential nursing home / illness costs in future, and whatever about the interest, I wish to at least preserve my basic funds.
From reading the excellent posts so far, it seems to be the general consensus that overseas in Rabo seems to be best option. What are the pros and cons of such a move, and are there other options open to me?
Views very much appreciated as it is hard to find a financial adviser who is not compromised or biased by self interest in some way.
 

onlyonpaper

Registered User
Messages
46
Interesting article over weekend on what would happen if Ireland defaulted and forced out of Euro. There would be a one to one conversion of Euro to New Punts. Withdrawls from accounts would be limited to small amounts to prevent run on banks. At a date soon after conversion Punt would be allowed to float and would drop 50-60% against other currencies.
Bank guarantees by Irish Govt may be worthless as money not available and Ireland would find it almost impossible to borrow.We would then have to make ends meet as a country immediately. If that is the real scenario,lets hope there is no default
 

oldnick

Frequent Poster
Messages
1,412
I'm wondering whether such a scenario (i.e. irish euro/punt devalues by 30+%) may mean an immediate increase in property prices.
Can you imagine how cheap Irish property would be for Brits and others ? Why would anyone buy in Newry/Derry if they could get a half-price property in Dundalk/L'kenny ? Uncle Seamus in Luton or Boston could now buy that cheap house back in the old sod !
And what a boost to exports -especially agricultural. And suprmarkets may actually stop importing spuds from Cyprus.

Just ruminating - I'm no economist but am I completely wrong?
 

Chris

Frequent Poster
Messages
1,323
I'm wondering whether such a scenario (i.e. irish euro/punt devalues by 30+%) may mean an immediate increase in property prices.
Can you imagine how cheap Irish property would be for Brits and others ? Why would anyone buy in Newry/Derry if they could get a half-price property in Dundalk/L'kenny ? Uncle Seamus in Luton or Boston could now buy that cheap house back in the old sod !
And what a boost to exports -especially agricultural. And suprmarkets may actually stop importing spuds from Cyprus.

Just ruminating - I'm no economist but am I completely wrong?
Exports would be boosted but this would be at least offset by import costs of oil, gas, coal, electricity, electronics, fruit, cars, movies, basically anything that is not or cannot be produced here.
But default does not mean leaving the Euro!
 
C

conman

Guest
Tracker + Deposit with NIB. Should I pay off Tracker?

Hi Everyone,
I have a tracker mortgage and also substantial deposit with NIB(part of Danske Bank regulated by Danish authorities). If Ireland leaves the Euro and re-adopts the punt does anyone know will I still be stuck with a Euro mortgage but a devalued deposit? Should I therefore pay off as much of the mortgage as I can now? Given the tracker rate is so good I hadn't intended paying it off as the deposit rate is higher than the mortgage( by about 1%).
Thanks and great posts.
 
B

blackgeorge

Guest
deposit

Hi, I am becoming increasingly nervous re the situation here so thinking of options re savings which are in a PO. saving a/c. it is in joint names, my wife is an Australian and we are both Pensioners with no income other than Pensions.
Should we transfer this money to Australia and what are liabilities with Revenue
if any. :)
 

minion

Frequent Poster
Messages
504
Hi Everyone,
I have a tracker mortgage and also substantial deposit with NIB(part of Danske Bank regulated by Danish authorities). If Ireland leaves the Euro and re-adopts the punt does anyone know will I still be stuck with a Euro mortgage but a devalued deposit? Should I therefore pay off as much of the mortgage as I can now? Given the tracker rate is so good I hadn't intended paying it off as the deposit rate is higher than the mortgage( by about 1%).
Thanks and great posts.
Your contract probably is about the rate, not the currency.
it tracks the ECB rate. So, if the currency is different you still get the ECB rate.
 

oldnick

Frequent Poster
Messages
1,412
Minion says something i hadn't thought of...
If our trackers are based on ESB rates and we revert to the punt what happens?
The Euro interest rate is forecast to steadily rise, which is not what the PIGS want. So, if we are back on the punt with lower interest rates than the ECB Euro rate could that mean our tracker rates (based on ESB) may no longer be a good deal ?

P.S. Conman - you say you get ca. 1% more on deposit than you are paying on mortgage. But is this after DIRT ?
 

Codogly

Frequent Poster
Messages
134
Conversion rates ...euro to punt

Hi Conman ... surely NIB would have to treat both your mortgage and deposits in the same manner ... either the both remain euro or the both convert to punt...!!!
Mortgage : They loaned you euro , so you own then euro back
Deposit : You gave them euro on deposit , so they owe you euro back.
 

Compass

Frequent Poster
Messages
29
Hmm! this has been bothering me recently so I wrote to RaboDirect.ie here as follows: "Hello, I have savings in a Rabo account. I understand from your information that 'We're part of the Dutch Rabobank Group.' and AAA rated etc.
My question is, are the several thousand € , that you hold in my account - in a Netherlands bank? Are they Dutch Euros?
What happens if Ireland is forced to leave the Eurozone and revert to the Punt with probable devaluation etc. Do our savings stay in Dutch Euros as that seems to be where we've saved them? Please clarify this important point for me. Thanks"

to which I received a reply as follows, "This is an unlikely scenario and you should note that there have been no actual steps taken to remove any of the weaker countries from the Euro.
If this situation did arise it would depend on the legislation that would be adopted by the Irish Government to resolve the issue.
Although we are licensed by the Dutch Central Bank we must comply fully with the codes of practice of the Central Bank of Ireland and with all relevant EU and Irish law. So if new legislation is passed by the Government to affect all banks operating in Ireland, RaboDirect could potentially fall within the remit of that legislation.
Again, this is speculation on the consequences of legislation which hasn't even been proposed, so it is hard to predict its effect."


So, I'm none the wiser - I had thought these savings were in the Netherlands and if Ireland was forced out of the Euro, would be held in Euros in Rabo group, but seemingly likely not?? There's an interesting correspondence on the matter from last year with the manager of RaboDirect on his blog but I can't post URL because of site rules here.
 

Van der Hoop

Registered User
Messages
35
I would assume Mtgs and Deposits would be converted at the agreed rate at the same time.

With regard rabo investment funds, most of these are quoted in EUR and listed on various exchanges. You should check the ISIN number of the fund and see if it is traded on an exchange.

If for example it is a EUR fund and is traded in Luxembourg exchange, you would expect that even if we converted back to the Punt, if you redeem shares they will be converted to from EUR to punt at then current exchange rate.

A EUR based fund us valued in EUR and any positions would have to be converted to PUNT in my opinion
 
C

conman

Guest
NIB Tracker etc

Hi Conman ... surely NIB would have to treat both your mortgage and deposits in the same manner ... either the both remain euro or the both convert to punt...!!!
Mortgage : They loaned you euro , so you own then euro back
Deposit : You gave them euro on deposit , so they owe you euro back.
Hi Codogly,
I'd like to think that you are correct but if Ireland goes back to the punt they could say this is now the legal tender in Ireland and convert my euro to punt but I could still owe them in euro - don't know but it has me concerned.
Conman
 
C

conman

Guest
Hi Minion,
My concern is not about the rate but having my euro deposit devalued.
Conman
 
C

conman

Guest
Hi Oldnick,
The deposit rate is 3% and the tracker is under 2% - after DIRT I'm still ahead.
Conman
 

Greensquare

Registered User
Messages
15
I am a Rabo Direct (Ireland) account holder, and I queried them on the event of Ireland leaving the Euro, what would happen to my savings. Would tehy stay in Euor's or would they be converted to punts.

This is the responce I got:
"Thank you for your email. This is an unlikely scenario and you should note that there have been no actual steps taken to remove any of the weaker countries from the Euro.

If this situation did arise it would depend on the legislation that would be adopted by the Irish Government to resolve the issue.

Although we are licensed by the Dutch Central Bank we must comply fully with the codes of practice of the Central Bank of Ireland and with all relevant EU and Irish law. So if new legislation is passed by the Government to affect all banks operating in Ireland, RaboDirect could potentially fall within the remit of that legislation.

Again, this is speculation on the consequences of legislation which hasn't even been proposed, so it is hard to predict its effect."


Going by this, it basiclaly depends on what legislation the Irish Government decide to come up with, in the event of Ireland leaving the Euro. In other words, in the unlikely event that Irleand leaves the Euro, as its unchartered waters, nobody knows what will happen.



 

cork

Frequent Poster
Messages
306
Re

ButIn a worst case sinario- If you got your to issue you a bank draft in euros. - you could then bring this draft over to a German bank.

Couuld this be an option to safegaurd your deposits?
 
C

conman

Guest
Euro etc

Hi Cork,

That's an good idea - only thing is this could all happen over a weekend and when you go to withdraw your money they may say sorry we're converting it to Newpunts.

Regards

C
 

sole

Frequent Poster
Messages
69
rabo - euro break up

I am confused on the Rabo business. In event of euro break up is there a difference in having a deposit with rabo or having an investment in one of their Funds. In each case do I get back Euro or "Punt".
If I get back "Punts" is this simply a name change at one to one or is it a devalued "Punt" leaving me with say half what I invested in Euro.
Will there be any difference between a deposit in an Irish bank and a deposit in Rabo in event of break up.
Any help? ?
 

sole

Frequent Poster
Messages
69
In case of the break up of Euro - What about a deposit in a Swiss bank? Would this be as good as Germany? Are there any problems about getting deposit in Switzerland.
 
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