Is it safe to leave sale proceeds in one bank

Z

Zico

Registered User
Messages
13
Hello,

We have recently sold our house and are looking to trade up. However in the meantime, while we rent, we are going to leave the sale proceeds (Euro 250 K) in the ICS.

1. We are not overly concerned about best interest rate, as we just want the money to be secure ?

2. We are not trying to time the market ......... just trying to remove the stress of selling and buying in the one timeslot.

Question: Is this a safe thing to do or should we spread the money around ?

Thanks,

Zico.
 
Zico said:
Question: Is this a safe thing to do or should we spread the money around ?
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Spread it around. Each bank has a max they will payout in the event of going bust.

The following is from BOIs 'Deposit Protection' leaflet, section 4, Limits on cover :
"The maximum level of cover provided to any depositor is 90% of the *aggregate* deposits held by that depositor subject to a maximum compensation payment of €20,000. Thus a depositor with a deposit account totaling €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."

It is unlightly to happen, but banks do go bust. AIB almost did twice and some say we are still paying for it in our taxes. My father in-law lost substantial savings in the 80's when his bank went bust. I have to thank him for my knowledge of bank's protection limits.!!



Towger.
 
The same will apply to me over the next couple of weeks. Will have about €260 on deposit for a couple of months(say Feb) till new house is finished. Was going to put it into Northern Rock, but you have me thinking now.
 
MandaC said:
Will have about €260 on deposit for a couple of months(say Feb) till new house is finished.
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The problem is going on a maximum of 20k at 90% you need 12 different banks (not accounts in the same bank) for €260k. Maybe split in to 2 or 3 banks. NR use peoples saving from Ireland to fund mortages in the UK, so unless something huge happens in the UK your money is fine.

Towger.
 
The chances of a bank going bust, while not zero, are extremely small. Personally I think you'd be better off just getting the best rate for your money and not leaving it too long on deposit (due to the eroding effects of inflation etc.) rather than worrying about banks going bust.
 
ClubMan said:
The chances of a bank going bust, while not zero, are extremely small. Personally I think you'd be better off just getting the best rate for your money and not leaving it too long on deposit (due to the eroding effects of inflation etc.) rather than worrying about banks going bust.
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I agree. In general terms, the larger the sum you have to invest with a bank, the better deal you will get in relation to rates. Splitting up the money between banks negates this advantage. You also run the risk of tying yourself up in knots in relation to anti-money laundering documentation if you spread a sum of money over several banks.
 
What is the current inflation rate in Ireland. Northern Rock are currently offering 4% (less DIRT) which equates to 3.2% net so I would have assumed that inflation shouldn't have too much of an affect on your deposit here - as opposed to deposits in an AIB current account which get a measily 0.5% (and only on balances of up to 1000 euro). This is the account that I currently have but am in the process of opening a Northern Rock account.
 
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