# Should we Move savings or put it into mortgage



## regvw (16 May 2011)

Hi All, 
I am in need of some direction, I am wondering is there any provider for the advice I am looking for. I am willing to pay for this advice, if it was as easy as booking an apointment. 

Basically both me and my wife have good steady jobs, we have savings which I know are probably not in the best accounts, we have one morgage which is in negative equity and we are about to start a self build on our own site. Topped with all this we are worried about the position here in Ireland, default, what would this do to our savings which is all in Irish banks. 

As you can see we have alot of concerns, could anyone reccomend a financial advisor or someone who could help.

Basically 
We have about 50K in savings in Irish banks
Morgage of 185K, house worth 150K
Selfbuild will cost about 150K  

Thanks
Reg


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## Slim (16 May 2011)

Obvious question - how are you going to fund the build cost of 100k net? Slim


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## regvw (17 May 2011)

Hi Slim I have morgage aproval for that, my main worry is teh savings I have, I sure I am not doing the correct thing with them


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## aristotle (17 May 2011)

Its always good to have some cash in the bank as a rainy day fund. If I was you I would keep 5k at least of your savings in case you need it.


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## julius128 (17 May 2011)

I would keep the saving (specifically if you have a tracker mortgage) in a safe bank like Rabo or NIB as the current economic climate is so volatile hence it is a wise decision to have cash in case is needed.
In your shoes I would probably open a Foreign Currency Account (Sterling) in Investec which is guaranteed by British Government when Euro reached over £0.90 pence per Euro for about 20000 pound, in case of Ireland forced to exit Euro and had to devalue Irish punt.


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## regvw (17 May 2011)

julius, thank you this is the kind of informatin I need, now why do you say Rabo and NIB is safe banks ??

on teh forein currency account I assume i wont earn much interest at all


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## julius128 (17 May 2011)

regvw said:


> why do you say Rabo and NIB is safe banks ??
> on teh forein currency account I assume i wont earn much interest at all



As they have a high credit rating by credit agencies also deposits are guaranteed by Dutch and Danish Governments.

No you will not earn very high interest rate, Investec is paying 2% and minimum balance is 20k Sterling. But the point is if Ireland exit Euro and convert to Punt they will devalue the currency very soon, and all Euro accounts in Ireland will change to Punt as well but foreign currency accounts.


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## regvw (17 May 2011)

Thank you Julius, 

I called into EBS today where I have some money in a term deposit account. They told me my money was guaranteed no mater what happens by the Irish deposit guarantee scheme. I cant get this money out untill November and I am hoping nothing drastic will happen untill then. 

Now here is my understanding based on what I think you are telling me, even if I had this money in rabo or NIB and Ireland exited the euro then my savings would still be converted to a devalued punt, the only way to avoid this would be to go to the foreign currency account. 

So if I have this great guarantee from the Irish deposit guarantee scheme then is my money just as safe in EBS as it is in rabo or NIB. 

sorry if this is long winded but I am just trying to understand all this 

Reg


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## julius128 (17 May 2011)

Well that is right your money is guaranteed by Irish government, but as long as Ireland doesn't go default. If that happens there is a chance that government forced to pay a percentage for every Euro you have in deposit. But this would be the last resort for any government as it is simply a shoot in foot and greatly generate the public anger. I dont think Ireland will go default or forced to exit Euro in next few months, probably we are talking about couple of years or even more, depends on decisions taken by wealthy EU states. If they dont take the wise decisions ASAP to help these pigs state out of trouble then it will be a matter of time for Euro to get tear apart.


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## regvw (17 May 2011)

would the goverment be able to take money out of a rabo or NIB account if we defaulted. In my opinion basd on what I have read I think default is guaranteed.


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## julius128 (18 May 2011)

Well they simply can do anything in extreme cases but they can say you have deposits in a bank which is owned by a bankrupt government so simply we dont have money to pay your full deposits. However they dont own the Rabo or NIB and not responsible for them (responsibility is with Dutch and Danish government if bank go bankrupt) hence in a very last resort they may place a percentage levy in all deposits hold in financial institutes operating in Ireland (like recently, they placed a levy in private pension funds)  but they have to overcome lots of legal and moral barriers to do so.


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