Protecting money on deposit

D

doodlem

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Hi, sometime ago I received an inheritance of 300k. I hope to buy my first house at the end of the year. The money is spread across 5 deposit accounts, AIB, Ulster Bank, Rabodirect, Northern Rock and NIB with none surpassing the relevant guarantee scheme in each case.

However I am now worried about 2 events:

1. The Irish government will not be able to borrow to meet liabilities and my accounts in Irish banks will no longer be safe as the government will be insolvent and they will default on the guarantee scheme. To circumvent this I plan to move money from my Irish accounts (AIB and Ulster bank) to others such as Rabo, Northern Rock and NIB. Does this make sense?

2. I am concerned regarding the speculation that Ireland will leave the Euro (or be ejected) and the possibility that my capital will be devalued if held in Irish banks (as we would float a new devalued currency). However, if it remains in a euro account in a bank not regulated in Ireland would I get to retain this account in Euro? There is a lot of talk that the government would have the power to freeze accounts to prevent money leaving the country in the event of the staging in of a new currency, could they freeze an account held in a foreign bank such as Rabo, Northern Rock or NIB as they are not directly Irish banks?

Can anyone offer any advice? ...Thanks
 
Correct me if I'm wrong but I believe the entire amount of your deposit is protected under the irish gaurantee scheme and up to ?£50000 in UK banks by the british government except for Northern Rock, where the full amount is gauranteed???

I was in Argentina on hols in 2002 shortly after the banks froze the peoples accounts and refuse to give them their money in the currency they had saved in (dollars)...I think eventually the banks did cough up.
It was a terrible time.

But the reality is .....nothing or no-where is completely risk free.
Congrats on your inheritance....personally I wouldn't loose alot of sleep over it.
 
I was pondering your issue some more and thinking...you could put all your cash in a safety deposit box in a bank. With deflation it won't be devaluing...you will be missing out on interest...but if you are really anxious about other options.

I think you should have it in euro as who knows what way currency exposure will work?

It's an OTT idea from my perspective....but might help you sleep at night...maybe.
 
Doodlem i can see where you are coming from on this, i too am worried about these guarantees. A guarantee is only worth the paper it is written on, so take for instance that our government runs out of money, so where are they going to get the money to make good our deposits. My motto is if you want to have something left from your money go and buy it, at least you will have the satisfaction of your purchase. And enjoy.
 
doodlem said:
Hi, sometime ago I received an inheritance of 300k. I hope to buy my first house at the end of the year. The money is spread across 5 deposit accounts, AIB, Ulster Bank, Rabodirect, Northern Rock and NIB with none surpassing the relevant guarantee scheme in each case.

However I am now worried about 2 events:

1. The Irish government will not be able to borrow to meet liabilities and my accounts in Irish banks will no longer be safe as the government will be insolvent and they will default on the guarantee scheme. To circumvent this I plan to move money from my Irish accounts (AIB and Ulster bank) to others such as Rabo, Northern Rock and NIB. Does this make sense?

2. I am concerned regarding the speculation that Ireland will leave the Euro (or be ejected) and the possibility that my capital will be devalued if held in Irish banks (as we would float a new devalued currency). However, if it remains in a euro account in a bank not regulated in Ireland would I get to retain this account in Euro? There is a lot of talk that the government would have the power to freeze accounts to prevent money leaving the country in the event of the staging in of a new currency, could they freeze an account held in a foreign bank such as Rabo, Northern Rock or NIB as they are not directly Irish banks?

Can anyone offer any advice? ...Thanks
Click to expand...

I was under the impression that the ulster bank is a parent company of the RBS and they are UK based bank and they guarantee is only up to the value of £50,000.
 
re:ulster bank
saw this today [broken link removed]
looks like it would fall under the UK scheme and not the Irish one in the event of RBS being nationalised
 
Is the article in error?. It states that the RBOS owns Lloyds, Surely not?. Lloyds Group is a new bank formed by the merger of Lloyds TBS and HBOS ( not RBOS)
 
Bessa said:
My motto is if you want to have something left from your money go and buy it, at least you will have the satisfaction of your purchase. And enjoy.
Click to expand...

Not good advice. People who have thought like this over the last decade will suffer the most or are civil servants...
 
Hi doodlem, I guess a way of getting around the possibility of Ireland leaving the Euro and your savings being converted to the new Irish punt would be to put your money into pretty secure Euro-based assets. Some of these banks have various investment products. Perhaps some are in government bonds in the larger Eurozone economies. There's no way the government could force conversion of these into "new punts". Of course there would be entry and exit and yearly maintainance fees. I'm also not sure if funds of this precise nature are available these banks. I remember that rabobank had a robecco based bond fund but this invested in bonds in the us, japan as well as Europe so there would be a certain currency conversion risk involved. I guess you could just go to a stockbroker and directly buy German government bonds. For such a large amount that might be the cheapest option.
 
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