# Northern Rock deposits sold to PTSB



## tomreillly

Northern Rock have sold their Irish deposits to PTSB

http://www.rte.ie/news/2011/0830/ilp-business.html

[broken link removed]


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## Lightning

So Northern Rock are pulling out of Ireland? That's Northern Rock, Ulster-owned First Active, INBS, Anglo, Pfizer International Finance, BoSI-owned Halifax and BoSI itself who have all stopped taking deposits in Ireland since the crisis hit. Hence, far less competition for deposits in Ireland. 

It seems at this stage that Northern Rock are still accepting new deposits. 

With the future of PTSB itself, also very uncertain, the deposits could yet wind up being transfered again to a different bank if PTSB closes or is merged.

Also, I wonder how happy NR customers are now that their deposits are been transfered from the, AAA rated, UK government backed NR, to the near-junk rated Irish state, or be it, soon to be 99% state owned PTSB.


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## Brendan Burgess

Hi Ciarán

Interesting points. 

However, PTSB has been so hugely overcapitalized that it must be one of the strongest banks in Europe.  It will survive on its own without a government guarantee. 

Of course, the government may force it to sell its UK mortgage book at a loss, so it may not be as safe as the numbers suggest. 

Brendan


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## WizardDr

Brendan:

There appear to be better results comimg from the UK - and you are right about PTSB - pity the savaged shareholders..


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## Lightning

Hi Brendan,

From a capitalisation perspective, yes, the most overcapitalised bank in Europe but this is based on historical stress tests from earlier this year. There are already indications that the baseline assumptions in the stress tests for criteria such as economic growth, house price declines and mortgage arrears were overly optimistic. Hence, it may not have this badge of honour for long as arrears on the PTSB's huge loss making tracker mortgage base grow.

From a liquidity perspective, 200% loans to deposits pre-NR deposit acquisition, and 99% state owned, PTSB, would not survive with the billions and billions of emergency liquidity provided by the CBI and the ECB. It is dependent on this for day to day survival. There is an intransient link between the state and PTSB.

Ciarán


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## Sunny

Kind of rubbishes the argument put forward by many people when discussing on whether we should have let all our banks fail that there are loads of foreign institutions lining up to enter the market to replace them. I am hearing that there is another large player looking to exit as well.


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## triplej

*Deposits in NR what now?*

Hi all, 

Sold my house last year and was lucky to leave with a modest sum.  Have been building on this over the past 18 months or so and have approx. 50k in savings.  
Moved to NR in the first place as I was not confident that we could avoid a sovereign default and therefore the bank guarantee would be meaningless.  Problem is I'm back to square now.
Not too sure what i should do next.  The intention is that the deposits would be built up to 65-70k with a view to repurchasing when the time is right.  This is the core family money (wife, two young children and a baby on the way); I have no faith in the security of the Irish banking system and have little more in the future of the euro.   
Sh


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## triplej

*Deposits in NR what now*

Apologies; writing on a damaged iPhone!!
Looking for advice as to what to do next; should I allow this money to be absorbed into Ptsb or as I'm inclined to do love it to another uk account or another denomination such as the Swiss franc or Norwegian krone. 
Any and all advice appreciated!
Tj.


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## daheff

triplej

i've got savings in NR too...i'll be moving them out of PTSB and into somebody like Nationwide UK -Ireland or opening a German savings ac (see thread in deposits section )

no way in hell am i leaving my savings in an irish state owned bank


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## Amygdala

How "over-capatialized" is PTSB?
Irish Life & Permanent has reported a pre-tax loss of €349m for the first half of this year, mainly due to loan losses at its Permanent TSB banking business .
I am feeling very uneasy about my savings in NR being transfered to PTSB. I have little faith/trust in the Irish Banking system. 
I think a full and frank discussion on how safe Irish banks are for their high street customers is necessary. I am also looking at opening a non-resident deposit account in other european countries such as Germany/France.


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## 44brendan

While agreeing that nothing in life is certain I see no real risk to any savings in the Irish banks and financial institutions backed by Government guarantee. While most people are be-moaning the downturn in the economy and blaming the Banks for not lending those same people are transferring their savings abroad which indirectly is impeeding the rate of economic recovery here. The Bank guarantee is backed by the ECB as evidenced by the significant levels of liquidity it is putting into the Irish banks to replace the fleeing deposits. A further bank failure here or in any EC country would cause economic chaos in Europe and whether it likes it or not the EC and ECB are tied in to ensuring that deposits are protected. While my level of funds are low I will consistently keep them in this country as I earned the money here and would like to see these funds being used to protect our own economy. Again I see the risk of loss as being negligible and there is too much scaremongering on this issue which further damages our economy.


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## Godfather

Just asked for closing of account via internet and asking for tax certificate as well


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## Chris

Sunny said:


> Kind of rubbishes the argument put forward by many people when discussing on whether we should have let all our banks fail that there are loads of foreign institutions lining up to enter the market to replace them. I am hearing that there is another large player looking to exit as well.



No, it doesn't rubbish the argument. The reason foreign banks are leaving is because they cannot compete with businesses that are artificially kept alive by state funding and support. It is not a level playing field for them. There are banks in Ireland that are pretty much bankrupt but are paying 4% interest annually, while their mortgage books are losing millions. The only reason they can do this is because of state support. It is the government interventions that are causing foreign banks to leave.


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## Sunny

Chris said:


> No, it doesn't rubbish the argument. The reason foreign banks are leaving is because they cannot compete with businesses that are artificially kept alive by state funding and support. It is not a level playing field for them. There are banks in Ireland that are pretty much bankrupt but are paying 4% interest annually, while their mortgage books are losing millions. The only reason they can do this is because of state support. It is the government interventions that are causing foreign banks to leave.


 
Has nothing to do with that. Banks all over Europe are getting State support. Banks have no interest in foreign markets. End of story. I work for one and recently tried to get an allocation of capital to the operation here to expand a business line for domestic lending into Irish and UK companies because margins were becoming very attractive. I was laughed at by the CFO. I don't think our financial institution will last past 2012 in Ireland and it has nothing to do with not being able to compete with the Irish banks. It has everything to do with the allocation of capital and risk returns. 

There are no French, German, UK banks looking to come into a Country with 14% unemployment, a dysfunctional property market and in the midst of a fiscal crisis.


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## daheff

A couple of points:

1 - PTSB savings rates are MUCH lower for demand deposit accounts than NR- will PTSB still offer the same rate as NR? Doubt it

2- The deposit protection scheme is all well and good -you'll get your money back in the event of a default....but it wont be immediately...you could be waiting 6mths or more


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## TrueBlue1150

I am also considering moving my savings from Northern Rock as the main reason why I opened the account was because of the AAA rating and UK government guarantee. As I have a mortgage with the AIB, I was thinking of moving all of the money into the AIB based on the idea that if my savings were at risk in the future, at least my debt could be written off against my savings. I don't really know if this even makes sense, but surely it makes more sense to hold savings in the same bank as ones debt?
The other question I have is this. The AIB are offering 3.45% on a fixed sum for one year. When the forms arrived, they were from Anglo Irish. If my money was in this account, is it the same as having it in the AIB and would my first point above still stand?


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## Lightning

daheff said:


> A couple of points:
> 
> 1 - PTSB savings rates are MUCH lower for demand deposit accounts than NR- will PTSB still offer the same rate as NR? Doubt it



Not true. they both offer 2.50%. They are both low. 

PTSB have much higher term deposit rates. 



daheff said:


> 2- The deposit protection scheme is all well and good -you'll get your money back in the event of a default....but it wont be immediately...you could be waiting 6mths or more



HA !! If the government ever has to pay out on 100 billion EUR in deposits in all irish banks you will never see your money.


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## Lightning

TrueBlue1150 said:


> I am also considering moving my savings from Northern Rock as the main reason why I opened the account was because of the AAA rating and UK government guarantee. As I have a mortgage with the AIB, I was thinking of moving all of the money into the AIB based on the idea that if my savings were at risk in the future, at least my debt could be written off against my savings. I don't really know if this even makes sense, but surely it makes more sense to hold savings in the same bank as ones debt?
> The other question I have is this. The AIB are offering 3.45% on a fixed sum for one year. When the forms arrived, they were from Anglo Irish. If my money was in this account, is it the same as having it in the AIB and would my first point above still stand?



Debt can be offset against savings by a bank, yes. This is common in a wind-down like the Danish bank wind-downs. 

AIB pay 4.25% for a 1 year term via their EBS subsidiary .



Sunny said:


> Has nothing to do with that. Banks all over Europe  are getting State support. Banks have no interest in foreign markets.  End of story. I work for one and recently tried to get an allocation of  capital to the operation here to expand a business line for domestic  lending into Irish and UK companies because margins were becoming very  attractive. I was laughed at by the CFO. I don't think our financial  institution will last past 2012 in Ireland and it has nothing to do with  not being able to compete with the Irish banks. It has everything to do  with the allocation of capital and risk returns.
> 
> There are no French, German, UK banks looking to come into a Country  with 14% unemployment, a dysfunctional property market and in the midst  of a fiscal crisis.



+1. Well said.


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## daheff

CiaranT said:


> Not true. they both offer 2.50%. They are both low.
> 
> PTSB have much higher term deposit rates.



where do you see them offering 2.5%?  As per their website the closest to a demand deposit i can see is their SIGNATURE DEPOSIT on call variable ac -which has a rate of 1.25% Gross

www[dot]permanenttsb[dot]ie/media/permanenttsb/pdfdocuments/depositrates/permanent-tsb-Deposit-Interest-Rates.pdf


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## roker

Pity I'm not as good at the lottery, I was with PostBank, Halifax and Irish Nationwide, all failed, which the latter has gone to the PTSB, I still do not know what interest I am getting, they seemed evasive in the local branch, and of course my share account which went on for years turned out worthless, no thanks to Fingelton


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## Lightning

daheff said:


> where do you see them offering 2.5%?  As per their website the closest to a demand deposit i can see is their SIGNATURE DEPOSIT on call variable ac -which has a rate of 1.25% Gross
> 
> www[dot]permanenttsb[dot]ie/media/permanenttsb/pdfdocuments/depositrates/permanent-tsb-Deposit-Interest-Rates.pdf



See here: http://www.askaboutmoney.com/showthread.php?t=102329

and see here: [broken link removed]

The PTSB online account pays 2.5%. The PTSB accounts for 0-19 year olds pay 3.0%.


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## pudds

Rabbo are offering 2.40% so think I'd prefer me few washers over there... despite the hassle of opening a new account again.

Is this not a big gamble that PTSB are taking in *assuming *that most NR customers will now leave their cash with them.


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## Lightning

pudds said:


> Is this not a big gamble that PTSB are taking in *assuming *that most NR customers will now leave their cash with them.



Depends on the contract. The transfer has not yet taken place. The price that IL&P pay to the UK government may be determined by deposits held as at transfer date that is in the future. 

Also, the agreement is subject to DoF/NTMA approval. This may not prove to be a formality.


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## pudds

CiaranT said:


> Depends on the contract. The transfer has not yet taken place. The price that IL&P pay to the UK government may be determined by deposits held as at transfer date that is in the future.
> 
> Also, the agreement is subject to DoF/NTMA approval. This may not prove to be a formality.



Hmmm either way looks like NR are going to pull out, there's hardly any chance they would stay now if this deal goes pear shape, is there!


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## Chris

Sunny said:


> Has nothing to do with that. Banks all over Europe are getting State support. Banks have no interest in foreign markets. End of story. I work for one and recently tried to get an allocation of capital to the operation here to expand a business line for domestic lending into Irish and UK companies because margins were becoming very attractive. I was laughed at by the CFO. I don't think our financial institution will last past 2012 in Ireland and it has nothing to do with not being able to compete with the Irish banks. It has everything to do with the allocation of capital and risk returns.
> 
> There are no French, German, UK banks looking to come into a Country with 14% unemployment, a dysfunctional property market and in the midst of a fiscal crisis.



I understand what you are saying, but this still does not mean that foreign banks would not come here if domestic banks were wound down. Markets provide services that are needed, and regardless of how bad things are or even get here, there will be need for banking and someone will jump in to provide that service. The world is a bigger place than Europe to find potential foreign banks to open or buy up existing banks.


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## Godfather

CiaranT said:


> HA !! If the government ever has to pay out on 100 billion EUR in deposits in all irish banks you will never see your money.



Hi CiaranT, I see your level of optimism equals mine...


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## Lightning

pudds said:


> Hmmm either way looks like NR are going to pull out, there's hardly any chance they would stay now if this deal goes pear shape, is there!



I am not saying NR will stay, NR have clearly decided to pull out.


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## oldtimer

Applied last Thursday to close my NR account. All finalised to-day very efficiently. Now to find a new safe home for my money.


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## Lightning

Interesting, you won't be the only one.


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## Billo

oldtimer said:


> Applied last Thursday to close my NR account. All finalised to-day very efficiently. Now to find a new safe home for my money.



Do they pay interest up to date when you close your account ?


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## Lightning

Billo said:


> Do they pay interest up to date when you close your account ?



Yes, with their instant access account.


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## Godfather

Got my interest certificate quickly as well as my accrued money on my reference account. Thank you NR! Great until the very end!


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## Lightning

Godfather said:


> Got my interest certificate quickly as well as my accrued money on my reference account. Thank you NR! Great until the very end!



Another NR saver bites the dust. I wonder if IL&P misunderstood and/or miscalculated the main reason why people have deposits with NR. Perceived Safety.


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## Godfather

CiaranT said:


> Another NR saver bites the dust. I wonder if IL&P misunderstood and/or miscalculated the main reason why people have deposits with NR. Perceived Safety.



Hi CiaranT, actually I've already got a saving account with IL&P. It's just that I didn't want to:
1) mix any of the 2 amounts
2) have problems with the interest certificate by the end of the financial year


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## daheff

Godfather said:


> 2) have problems with the interest certificate by the end of the financial year


 

whats the interest cert for?


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## Lightning

daheff said:


> whats the interest cert for?



DIRT declaration.


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## daheff

CiaranT said:


> DIRT declaration.



i didnt think you needed to declare you paid DIRT as its deducted at source?


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## Lightning

daheff said:


> i didnt think you needed to declare you paid DIRT as its deducted at source?



You do. 

You need to declare deposit interest even if you paid DIRT. You will get a credit for the DIRT paid if you have other income that covers the DIRT tax credit, if you don't have income to cover it you will have to pay income tax rates on your deposit income.


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## daheff

CiaranT said:


> You do.
> 
> You need to declare deposit interest even if you paid DIRT. You will get a credit for the DIRT paid if you have other income that covers the DIRT tax credit, if you don't have income to cover it you will have to pay income tax rates on your deposit income.


 

run this by me again?? So if i receive interest income, I have to declare it? I thought that was only when the interest income was your *only/main* source of income? And i can get a credit for the dirt tax paid too if other income covers it? what kinds of income? {please excuse my ignorance on this matter....i've never really had any savings of note before so its never been an issue!}


also on the back of the main point of the thread, i was talking to NIB today, they are offering 3% on demand deposit account (but u need to open a current ac to avail of it)


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## Lightning

daheff said:


> run this by me again?? So if i receive interest income, I have to declare it?



Yes. 



daheff said:


> I thought that was only when the interest income was your *only/main* source of income?



No. 



daheff said:


> And i can get a credit for the dirt tax paid too if other income covers it? what kinds of income?



Yes. 

PAYE income, rental income etc etc etc

Hence, in most peoples case, their personal tax liability does not go beyond DIRT as the tax credit covers the DIRT. One exception was the health levy, which in previous years, was payable on deposit interest income with no tax credit granted.


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## becky

I have to say I wasn't aware of this.  Is this a recent requirement?


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## Lightning

Nope. 

The reality is that the Revenue are only likely to go after those that have very large deposit interest.


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## Billo

becky said:


> I have to say I wasn't aware of this.  Is this a recent requirement?



That's news to me as well.


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## The Ghoul

May be of use:

http://www.citizensinformation.ie/e...vestments/deposit_interest_retention_tax.html

"You do not have to pay any further tax on the interest but it is declared as income if you are making a tax return"

PRSI on deposit interest
[broken link removed]


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## Lightning

The Ghoul said:


> "You do not have to pay any further tax on the interest but it is declared as income if you are making a tax return"



Exactly for most people. 

Some people are subject to a further tax liability if they do not have excess taxable income that a DIRT tax credit will cover.


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## pudds

Any developments on this as we are getting near the years end now and I still have a few washers with them!


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## Lightning

The sale is expected to complete by the end of 2011, subject to approval from the Minister for Finance.


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## DoctorEvil

CiaranT said:


> The sale is expected to complete by the end of 2011, subject to approval from the Minister for Finance.



I see where Nothern Rock has now been sold on to Virgin Money in the UK and they are using the same timescale for that deal too.


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## Lightning

Yeah, so Virgin Money is unlikely to be the owner of the NR Ireland deposits assuming they both work to the same timescale.


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## pudds

The minister for Finance has given his approval and the transfer is due to take effect on 3rd January, 2012.

Now what to do with my few washers here, think I will shift them as I think PTSB has a lot of debt.


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## Lightning

pudds said:


> The minister for Finance has given his approval and the transfer is due to take effect on 3rd January, 2012.



Thanks for the update. 1 month of NR Ireland left so. 

I wonder if the NR products will be open to new customers for much longer.


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## Delboy

got the letter yesterday about the transfer.
As a sweetner, they've upped the deposit rate from 2.5% to 3.25%, despite the recent central bank drop


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## pudds

Delboy said:


> got the letter yesterday about the transfer.
> As a sweetner, they've upped the deposit rate from 2.5% to 3.25%, despite the recent central bank drop



yeah but reckon that is only because PTSB and the Irish banks are desperate for depositors.

Not so long ago depositors cash was treated like something they had  picked up on the sole of their shoes..... ooh how times have changed!


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## Lightning

Northern Rock Ireland have closed their doors today. The 7th 'brand' to remove itself from the retail deposit market in Ireland since the crisis started in 2008. 

Once upon a time, Northern Rock Ireland were the most competitive bank for retail deposits in Ireland. 

I get the sense that the Northern Rock Ireland exit is not the last retail deposit exit.


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## DoctorEvil

Checked my account online this morning and the website has been changed to PTSB logos.
Still the same URL - maybe they will change this later.
On a more important note the 2011 interest had not been applied to my account - I'll check again tomorrrow. 
Previous years were posted on 31st Dec but with the Bank holiday and change over that may have been delayed.


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## stanbowles

*nr transfer*

Ditto re non-payment of interest. Not a good start. 

Stan


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## Lightning

I bet this has fallen down between NR and PTSB. 

Have you queried this?


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## 8611

Hmmm actually the Norweigan Kroner is more stable than the Can Dollar. Might split it 50 50 between the two if the charges for operating the account aren't too high


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## Delboy

I spotted the non-payment of interest also this morning and emailed them on it. No response yet


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## Lightning

PTSB have clearly made a mess of their year end bank interest. 

Has anyone phoned PTSB about the NR interest?

PTSB paid me interest, on my current account, as at January 3rd 2012 using a 27% DIRT rate. Payments from January 1st 2012 onwards should obviously have a 30% rate. It should have been paid as at December 30th or 31st 2011 using the 27% rate.


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## skrooge

CiaranT said:


> PTSB have clearly made a mess of their year end bank interest.
> 
> Has anyone phoned PTSB about the NR interest?
> 
> PTSB paid me interest, on my current account, as at January 3rd 2012 using a 27% DIRT rate. Payments from January 1st 2012 onwards should obviously have a 30% rate. It should have been paid as at December 30th or 31st 2011 using the 27% rate.




In fairness to NR (it was NR up until the 3rd) my account says interest paid as 31-12-11 and at 27%.  I seem to remember the site being a little slow to update in previous years, just this year people are watching it a little more closely.


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## pudds

on the 29th Dec most of my money with NR was transferred out leaving approx 5k.  Interest was credited on the 31st December.


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## Lightning

skrooge said:


> In fairness to NR (it was NR up until the 3rd) my account says interest paid as 31-12-11 and at 27%.  I seem to remember the site being a little slow to update in previous years, just this year people are watching it a little more closely.



Well then clearly PTSB have fixed the problem.


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## MysticX

The migration to the PTSB systems seems to have gone smoothly (kept my Demand Online account open).

A call and 5 minutes later I was up and running with online banking (Open24).
Current balance and transaction history is correct and up-to-date.
I was able to add payees without problems so looks like personal details were transferred fine as you need a valid mobile number to add payees (confirmation code).

You can find online versions of the information guide and T&Cs and Charges at:
[broken link removed]

[broken link removed]


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