Where to put large deposit for short term

sonya2

Registered User
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2
We are returning to ireland from overseas next year. We will have approx. 900,000euros from savings and house sale. We plan to buy a new home in the next year. In the meantime, where best to deposit the lump sum?
 

Steven Barrett

Registered User
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4,073
Stick it in any bank. You can easily set up a deposit account with your current account provider. With interest rates non existent, you won't lose out on a return.

The thing you will need to watch out for is being charged to hold such a large amount on deposit. At present, €1m is the threshold where some banks are charging customers to hold cash. That can quiet easily be brought down. If so, they will tell you and you can open another account with another bank and split it.


Steven
www.bluewaterfp.ie
 

Sue Ellen

Moderator.
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8,350
Stick it in any bank. You can easily set up a deposit account with your current account provider. With interest rates non existent, you won't lose out on a return.

The thing you will need to watch out for is being charged to hold such a large amount on deposit. At present, €1m is the threshold where some banks are charging customers to hold cash. That can quiet easily be brought down. If so, they will tell you and you can open another account with another bank and split it.


Steven
www.bluewaterfp.ie

In light of the guarantee offered by the Irish Government Deposit Guarantee Scheme wouldn't it be better to split it in any case. €200,000 per institution for a couple. AIB, EBS and Bank of Ireland (who will probably have charges by then ) and see what other banks are still lurking at that stage in Ireland :)
 

Brendan Burgess

Founder
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Hi Sonya

Do you know where you want to buy a house when you return?

It might be better to just buy that house now if you see one that you like.

Brendan
 

Steven Barrett

Registered User
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4,073
In light of the guarantee offered by the Irish Government Deposit Guarantee Scheme wouldn't it be better to split it in any case. €200,000 per institution for a couple. AIB, EBS and Bank of Ireland (who will probably have charges by then ) and see what other banks are still lurking at that stage in Ireland :)
The guarantee scheme is just a comfort blanket. It wasn't used in 2008 and with banks fully capitalised now, there is no need for it now. If the OP her partner both have current accounts, I'd just open up a deposit account with each current account and split the money until ready to buy.
 

Zenith63

Registered User
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872
Put it into National Savings
I'm in a similar situation and bought Prize Bonds, had the first win in the very first draw so already up on what the banks would give. You cannot sell Prize Bonds within 3 months of purchasing them, but that's not an issue for the OP, or let's be honest anybody with how slow conveyancing moves in Ireland.

The guarantee scheme is just a comfort blanket. It wasn't used in 2008 and with banks fully capitalised now, there is no need for it now. If the OP her partner both have current accounts, I'd just open up a deposit account with each current account and split the money until ready to buy.
Also as somebody else here pointed out recently, "Money deposited in relation to the purchase, sale or equity release by the depositor in respect of a private residential property" is covered over €100k by the Temporary High Balances clause in the bank guarantee.
 

Marc

Registered User
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1,506
The guarantee scheme is just a comfort blanket. It wasn't used in 2008 and with banks fully capitalised now, there is no need for it now. If the OP her partner both have current accounts, I'd just open up a deposit account with each current account and split the money until ready to buy.
In other news S&P and Moody’s have just cancelled their credit ratings on Irish Banks citing some guy in Dublin who said that there isn’t any default risk. I mean there must literally be a money tree outside Leinster house . In fact income tax can be abolished because bailing out the banks again won’t cost anything as they are “fully capitalised”

If you want to know how messy things can really become become for savers in a small county. Two words “Ice save”


It’s completely irresponsible to say that you can ignore credit risk to a bank as a saver.
 

Steven Barrett

Registered User
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4,073
Landsbanki wasn't protected by the ECB. All Irish banks were and the ECB clearly stated at the time that no bank would fail. It is not the same.
 

NoRegretsCoyote

Registered User
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3,180
@Marc @Steven Barrett

The framework at EU and national level for bank resolution and deposit protection has changed hugely since those events (and in fact some banks in Cyprus were allowed to fail and burn depositors).

There is now €52bn in a fund at EU level to protect depositors in the event of a very bad bank resolution. Banks are also much better capitalised than ten years ago. Post-Covid, many banks are swimming in deposits too. Personally I see the chance of retail deposits >€100k being wiped out as microscopic, but I would still avail of free insurance by spreading deposits across institutions.

@sonya2 - deposits over €100k (or €200k for a joint account) are guaranteed for six months if they originate from the sale of a property.
 
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