NIB to launch 5% Term Deposit A/C

J

John Rambo

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NIB are about to launch a 5% term deposit account. It'll be for amounts between €5000 and €65,000 but branches will have discretion to accept larger amounts from individuals. The ceiling is to stop credit unions or commercial entitities using the facility. The term will be 4 months so the money is NOT on demand.
 
Does that mean we'd need to give 4 months notice to access any of the money?

Fanny
 
So if the fixed term is four months wouldn't it be more accurate to say that the funds are locked up for four months and no notice is required to withdraw them at the end of the term?
 
GeneralZod said:
So if the fixed term is four months wouldn't it be more accurate to say that the funds are locked up for four months and no notice is required to withdraw them at the end of the term?
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That's my reading of it too Zod - preumably then after the four month term is over you withdraw or it rolls over??
 
Doesn't seem that attractive compared to NR's 5% on any demand deposit amount over €1K with a 100% guarantee on deposits and interest.
 
NR's high rate and position as highest deposit interest payer will not be allowed continue indefinitely. "Ron Sandler, executive chairman, has pledged that the lender will not "sustain prolonged presence as market leader in any product category" ". http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/04/01/cnrock201.xml

Anyone going to trouble of opening an NR account purely for its higher rate should be aware that the rate won't last. (I'm assuming pressure would come on Irish rates for the same reason as in the UK.)

Even if the rate did last and despite the government guarantee I'd be slow to effectively reward NR for their incompetence by giving them my savings.
 
Given reaction to the Rabodirect rate change here last December I think there's quite a few who will take the (currently) higher rate versus finger wagging :)

Course there's also First Active, Halifax offering better returns on more limited amounts too!
 
I think you will find that fixed term deposit accounts can be withdrawn from early (e.g. on the day) subject to an early withdrawal charge. It should be described in the terms and conditions. I believe in the case of NIB from previous ocassions doing this with them, the charge is based on the difference between the interbank rate of the day for the term to maturity Vs the rate of the deposit. In other words, the 4 month interbank rate (or the residual maturity i.e if withdrawing after 1 month then the interbank rate to measure is the 3 month rate) would have to go through 5% before you would have to pay a charge.
 
TSThomas said:
Given reaction to the Rabodirect rate change here last December I think there's quite a few who will take the (currently) higher rate versus finger wagging :)

Course there's also First Active, Halifax offering better returns on more limited amounts too!
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First Active sucked me in to their ECB linked account offering 4.5% last November. Then in March they dropped the rate to 4% without any direct notification to me other than a notice in the newspaper. Two weeks later I received an insert from them in a statement that was showing the rates unchanged at 4.5%? Apparently they didn't destroy their old and incorrect interest rate leaflets but decided to post them out anyway.
 
NIB's offer is not bad, considering you have a better guarantee on your money than with most Irish banks where your limit is 90% of 20.000EUR.
So if there is a lump sum which won't be needed straight away... still the exact t&c on early withdrawl would be important to look at.
Also you can open it walking into a branch, as many people still don't like opening online accounts or mailing copies of all their documents.

Fanny
 
I imagine NIB hope to use this product as a way to hold on to customers who might otherwise 'walk' from their [broken link removed], the rate on which just dropped from 4.5% to 3.9% (see the relevant Best Buys post).
 
Fanny said:
NIB's offer is not bad, considering you have a better guarantee on your money than with most Irish banks where your limit is 90% of 20.000EUR.
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How so? Are they not participants in the Central Bank/IFSRA depositor protection scheme?
 
Clubman, they offer the Danish protection limits which are higher (circa €40,000ish I think!)
 
Hi Clubman,

according to Brendan when it comes to securities:

http://www.askaboutmoney.com/showpost.php?p=597222&postcount=4
"Next best bet is NIB. Your deposit is underwritten by the Danish Deposit Guarantee scheme. This guarantees 100% of Kr300k, or €40k approx."

At the same time Brendan put the NIB in the list of banks covered by the Irish Deposit Guarantee Scheme. So I wonder which one applies.

So if the 100% security applies and you plan to go away for a few month and want peace of mind, this might be suitable.

Fanny
 
I can see your point Clubman (why look at anything else if you can get 100% on all), however for how long will they offer that security?
NR is just in an exceptional phase. Even NR will not offer that security forever, just for a certain period of time.
Not everyone likes to open an account by mailing all their details. Many people still prefer walk-in branches.

So is NIB secured by a) the Irish scheme (90% up to 20.000) OR b) the Danish scheme and is it 100% on ca.40.000 EUR.
It's not clear in best buys. I'll have to ask them next time around unless one of you knows.

Thanks

Fanny
 
Fanny said:
NR is just in an exceptional phase. Even NR will not offer that security forever, just for a certain period of time.
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Make hay while the sun shines - i.e. as long as HMG offers citizens such as ourselves such a guarantee.
Not everyone likes to open an account by mailing all their details. Many people still prefer walk-in branches.
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I know but that is totally separate to the of security of deposits.
 
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