# Deposit safety in Rabo/ NR/ NIB if Ireland defaults



## mmmmm (8 Dec 2009)

Hi, I can't seem to find a definitive answer regarding what will happen to deposits if the country goes under and IMF move in etc

I assume large sums of money (circa 100k) in AIB, BOI etc which are covered by the Irish guarantee scheme will be lost but will large sums of money deposited in NIB (Danske Bank), Northern Rock (UK Gov. AAA) and Rabodirect (Netherlands AAA) be safe 

Can anyone shed some light on this? Cheers


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## Lightning (9 Dec 2009)

My reading into this is there would be no impact for these deposits. 

For example, the UK Treasury, guarantee 100% of the deposits in Northern Rock Ireland. That guarantee is not contingent on the state of the Irish finances. If Ireland gets in trouble, the UK Treasury guarantee still holds.


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## mmmmm (10 Dec 2009)

Thank you for your reply. I assumed the same but I had, and I suppose I still have, some doubts...


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## crabbybear (10 Dec 2009)

I wouldn't assume anything if you have a lot of money on deposit. I hope fungus is correct as I have already asked this question in another thread, as far as I'm aware from the propertypin website these accounts wouldn't be safe if Ireland went bust.


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## mmmmm (11 Dec 2009)

Hey crabbybear... I know what you mean about not 'assuming' anything but what are the options! Buy property? Thats the plan alright but holding out for further drops so I'm kind of stuck at the moment and a bit concerned....


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## burmo (11 Dec 2009)

Is there any interesting Europe based euro accounts with ~3% interest rates that we could open from Ireland?


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## Lightning (12 Dec 2009)

A few. 

The best offshore rate that I am aware of is with Anglo Isle of Man 
[broken link removed]

3.35% for a one year EUR term deposit. 
3.55% for a one year GBP term deposit. 

You may not want an Irish bank .... offshore EUR best buys from MoneyFacts are here.


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## burmo (12 Dec 2009)

Hmm... Moneyfacts doesn't have anything with a good rate.... I know it's because the ECB is so low...


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## roker (13 Dec 2009)

I have saving in Post Bank which is not Irish based, will this still be safe?


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## Lightning (13 Dec 2009)

PostBank in Ireland? They are not offshore. 

They are 50% owned by An Post and 50% owned by BNP Paribas who are AA rated.


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## roker (13 Dec 2009)

fungus said:


> PostBank in Ireland? They are not offshore.
> 
> They are 50% owned by An Post and 50% owned by BNP Paribas who are AA rated.


 
What does that mean? Were they not owned by Fortis, I did not know they had changed.


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## Lightning (13 Dec 2009)

Most parts/a lot of Fortis was acquired by BNP Paribas.


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## crabbybear (14 Dec 2009)

mmmmm said:


> Hey crabbybear... I know what you mean about not 'assuming' anything but what are the options! Buy property? Thats the plan alright but holding out for further drops so I'm kind of stuck at the moment and a bit concerned....


 
I'm in the same position as you. Want to buy but property will keep falling so no point throwing money away. If you think Ireland inc will go bust as far as I can see, money needs to be offshore to be 100% safe from Irelands woes. At present my deposit is fixed in BOI until April and then I will probably take my chances with Rabo and some banks in Ireland under UK protection. Rates look very low offshore and don't really know how to go about it, can you open offshore account with Irish address?


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## Lightning (14 Dec 2009)

crabbybear said:


> Rates look very low offshore and don't really know how to go about it, can you open offshore account with Irish address?



Most offshore rates are low, a small few are reasonable. 

Yes, you can open many offshore accounts with an Irish address. Interest needs to be declared to the Revenue.


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## PetPal (15 Dec 2009)

I'm also concerned.  Pardon my ignorance but how safe would it be to open foreign/offshore accounts?  Are we just saying that in case Ireland "fails" then at least it's best to have your money ANYwhere but here? Thanks.


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## gInvestor (17 Dec 2009)

Is this correct; if the IMF come in your savings are lost ? how is this..


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## marksa (18 Dec 2009)

fungus said:


> Most offshore rates are low, a small few are reasonable.



the rates in Ireland are so high because the local domestic Irish banks (AIB,ANGLO,BKIR EBS etc) are desperate for cash and they have to pay through the nose to raise on international markets. Apart from Greece, Ireland has the highest cost of borrowing funds on international markets at moment. It also explains why Banks located in Ireland that are "non-Irish" - Rabo,NIB, NR do not need to pay up the very high rates local banks do. 

As the CEO of ILP said to the Oireachtais committee recently, paying 3.5% for deposits and lending on a mortgage at 3.19% does not make economic sense. Either the deposit rate will fall, or the mortgage rate will increase. Or both!


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## Lightning (19 Dec 2009)

marksa said:


> As the CEO of ILP said to the Oireachtais committee recently, paying 3.5% for deposits and lending on a mortgage at 3.19% does not make economic sense. Either the deposit rate will fall, or the mortgage rate will increase. Or both!



Yes and no. 

The IL&P CEO used some spin on the rates. He quoted some of their best deposit rates and some of their best mortgage rates. The reality is that most savers are in accounts with close to zero interest and a lot of mortgage holders are on fixed rate deals at higher rates. 

If the CEO was been honest he would have quoted average rates and not the extremities. 

Anyway, yes, I agree with the principal that mortgage rates will need to increase or saving rates will need to decline to help the banks profitability. 

In the UK saving rates are much higher above BOE base rates than in Ireland as are mortgage rates. I think the pressure will fall on mortgage rate increases more than savings rates over the coming year.


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## inver (21 Dec 2009)

What would the situation be with Halifax.ie and First Active in the event of an Irish default, given they have UK links?


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## roker (21 Dec 2009)

fungus said:


> PostBank in Ireland? They are not offshore.
> 
> They are 50% owned by An Post and 50% owned by BNP Paribas who are AA rated.


 
No answer to this one either. If it is 50/50 Irish owned, how will it stand under a guarantee


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## Lightning (21 Dec 2009)

inver said:


> What would the situation be with Halifax.ie and First Active in the event of an Irish default, given they have UK links?



First Active no longer exist. They are now branded as Ulster Bank who are owned by RBOS. 

Your money is safe unless Lyolds Banking Group/RBOS also goes to the wall. 

It is possible that if Ireland defaults, which I think is unlikely, that Lyolds Banking Group/RBOS would not also go to the wall as they are largely owned by the UK govt. Hence, deposits with these banks would not be impacted in this situation.


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## Lightning (21 Dec 2009)

roker said:


> No answer to this one either. If it is 50/50 Irish owned, how will it stand under a guarantee



Do you mean if Ireland defaults?

I would *guess * that the biggest bank in Europe, BNP Paribas, would not let any of their, effective savers, loose money. 

BNP Paribas would step in, I would *guess*.



The most risky banks, if Ireland defaults, in my opinion, would be 'pure' Irish banks with heavy state dependence such as Anglo, INBS or AIB.


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