# NIB to launch 5% Term Deposit A/C



## John Rambo (1 May 2008)

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.


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## Fanny (2 May 2008)

Does that mean we'd need to give 4 months notice to access any of the money?

Fanny


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## John Rambo (2 May 2008)

Fanny said:


> Does that mean we'd need to give 4 months notice to access any of the money?
> 
> Fanny


 
Yes


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## GeneralZod (2 May 2008)

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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## messyleo (2 May 2008)

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?


 
That's my reading of it too Zod - preumably then after the four month term is over you withdraw or it rolls over??


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## ClubMan (2 May 2008)

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.


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## ashambles (2 May 2008)

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.


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## TSThomas (2 May 2008)

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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## marksa (3 May 2008)

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.


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## BOXtheFOX (3 May 2008)

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!


 
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.


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## Fanny (4 May 2008)

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


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## ClubMan (4 May 2008)

BOXtheFOX said:


> First Active sucked me in to their ECB linked account offering 4.5% last November.


"Sucked me in" makes it sound dodgy. What exactly do you mean?


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## DrMoriarty (4 May 2008)

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).


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## ClubMan (4 May 2008)

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.


How so? Are they not participants in the_ Central Bank/IFSRA_ depositor protection scheme?


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## messyleo (4 May 2008)

Clubman, they offer the Danish protection limits which are higher (circa €40,000ish I think!)


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## ClubMan (4 May 2008)

Ah - I forgot that _Danske Bank _bought them out a few years ago!  Thanks.


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## Fanny (7 May 2008)

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


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## ClubMan (7 May 2008)

_NR _offer 100% security for *all *deposits. _NIB _do not according to the above.


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## Fanny (8 May 2008)

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


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## ClubMan (8 May 2008)

Fanny said:


> NR is just in an exceptional phase. Even NR will not offer that security forever, just for a certain period of time.


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.


I know but that is totally separate to the of security of deposits.


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## John Rambo (8 May 2008)

I heard today that Irish Nationwide are paying 7.25% on deposits in the Isle of Man. Obviously it's Sterling so you're into currency speculation as well but given the level the currency is at right now it mightn't be a bad bet. Does anyone know if this would fall under Irish or UK deposit protection systems? Perhaps it's neither.


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## Fanny (9 May 2008)

Hey Rambo,

check out the Nationwide tread there is a similar offer for EUR regular savers here. 
http://www.askaboutmoney.com/showpost.php?p=609632&postcount=1

This tread is not about Irish Nationwide but on National Irish Bank.

Fanny


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## ClubMan (9 May 2008)

John Rambo said:


> I heard today that Irish Nationwide are paying 7.25% on deposits in the Isle of Man. Obviously it's Sterling so you're into currency speculation as well but given the level the currency is at right now it mightn't be a bad bet. Does anyone know if this would fall under Irish or UK deposit protection systems? Perhaps it's neither.


What about the costs of converting € to GBP£ and back? Also I believe that deposit interest on non resident accounts such as this would be assessable for income tax at your marginal rate (and perhaps also _PRSI _depending on the level of interest earned) and not just _DIRT _at 20%. Either way not such a no brainer as far as I can see.


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## John Rambo (9 May 2008)

ClubMan said:


> What about the costs of converting € to GBP£ and back? Also I believe that deposit interest on non resident accounts such as this would be assessable for income tax at your marginal rate (and perhaps also _PRSI _depending on the level of interest earned) and not just _DIRT _at 20%. Either way not such a no brainer as far as I can see.


 
Yes, you're right. I have a connection who converts money for me at virtually no cost so that doesn't worry me but the 47% tax muddies the waters. You'd have to wonder whether this DIRT tax anomaly is anti-EU competitiveness policy. Thanks.


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## oldtimer (12 May 2008)

Cannot find anything on their website but advertisements in Sunday papers announce 5.1% term deposit account for a fixed period of 4 months. ''Minimum balance is €5,000. Maximum balance is €64,999. On maturity, unless otherwise advised, the account defaults into an Instant Savings Account which currently has rates up to 2.25% AER. Investment period from 05/05/08 to 27/06/08. All returns subject to DIRT. Only one account per customer and open to personal customers only. Danske Bank A/S (trading as National Irish Bank) is athorised by the Danish FSA in Denmark. Call into any of our branches to open an account today.''


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