# Are the banks under orders to get depositors to decrease their savings?



## Gervan (17 Oct 2012)

Last month the AIB wrote to me that they were restricting the amount of money I could put in my deposit account. This is an old account for which they are changing the terms and conditions. I had to tell a pension provider to stop paying into AIB and use a different bank. 
I went into the branch to discuss the reason behind their action but orders come form head office. The staff did not seem bothered that I was reducing the amount I put in to their bank.

We have the BOI closing branches and forcing people to use machines when many are not comfortable doing that. I should imagine accounts will be closed and money withdrawn.

Yesterday I had notice from Ptsb that my deposit account with them will have interest rates reduced from 4% to 0.2%. Obviously I will close the account just before the interest change.

Why are these banks apparently encouraging depositors to draw out their savings? I would have thought they needed deposits.
All I can imagine is that, government having virtual control of the banks, someone up there has decided depositors drawing their money out of the banks will stimulate the economy with their spending.

Does anyone have a less paranoid reason?


----------



## CharlieR (19 Oct 2012)

No but they are wasting **** loads of money advertising their new terms on the tv, radio etc rather than just sending a letter.

Never fails to amaze how they can waste money, a letter added to a statement must cost a cent compared to millions spent on advertising. 

Not an answer to your rate problem but shows they have no idea still how to run one.


----------



## Jim2007 (19 Oct 2012)

CharlieR said:


> No but they are wasting **** loads of money advertising their new terms on the tv, radio etc rather than just sending a letter.
> 
> Never fails to amaze how they can waste money, a letter added to a statement must cost a cent compared to millions spent on advertising.
> 
> Not an answer to your rate problem but shows they have no idea still how to run one.



Actually, "just adding a letter" as you put it is anything but the cheap option!  The entire process of client reporting is complex, mission critical and usually evolves two or three parties, so it is often cheaper to give an ad agency 50K to run an ad...


----------



## CharlieR (20 Oct 2012)

And how many parties does it take to plan organise and pay for an advertising campaign. I have never seen the like of banks or utility companies in the uk doing this and they are light years ahead of Irish banks.

They send the terms out anyway with the statements so the letter gets done anyway in letter form, so they just waste the 50k.


----------



## Lightning (20 Oct 2012)

Gervan said:


> Last month the AIB wrote to me that they were restricting the amount of money I could put in my deposit account. This is an old account for which they are changing the terms and conditions.



What is the name of the legacy AIB deposit product that you are referring to? 



Gervan said:


> We have the BOI closing branches



Not true. BoI have announced zero branch closures thus far. 



Gervan said:


> forcing people to use machines when many are not comfortable doing that.



The vending machines make a lot of commercial sense, less errors and makes banking more efficient. People need to get used to the change. 



Gervan said:


> Yesterday I had notice from Ptsb that my deposit account with them will have interest rates reduced from 4% to 0.2%.



Again, name the product please. I think you are talking about a PTSB term deposit. This is unfortunately perfectly normal behavior by a bank when a term deposit matures. 



Gervan said:


> Why are these banks apparently encouraging depositors to draw out their savings?



They are not. The actions you refer to are typical bank actions with legacy and maturing accounts. They are just preying on the vulnerable and ignorant that do not switch to a better paying product or account. 

All Irish banks need to hit 122.5% loans to deposits ratio by 31 December 2013 and eventually 100% loans to deposits ratio to remove ECB/CBI funding. Deposits have grown in Irish state banks in the last 12 months. 



Gervan said:


> I would have thought they needed deposits.



Yes, all 3 pillar banks still need more deposits. 



Gervan said:


> All I can imagine is that, government having virtual control of the banks, someone up there has decided depositors drawing their money out of the banks will stimulate the economy with their spending.



Not true.


----------



## Gervan (20 Oct 2012)

Hi Ciaran,
the AIB account was a Personal Savings Plan. Up till now I have been able to deposit and withdraw without limit. Now I am restricted as to the amount I can put in, which as I say, meant I had to redirect incoming funds to a different bank. 
I can understand terms and conditions changing but not why the bank staff did not suggest changing to another type of account to keep the incoming funds, and seemed quite indifferent to losing money.
You say all the banks need money, but that is not the impression I am getting.

The Ptsb is not a term deposit, but an AUD account. Even if it were a term deposit, to go from 4% interest to 0.2% is unusually drastic, and makes me feel that my funds are not wanted.

You come across as rather hostile, when all I was doing was asking for another reason for what I see as possible co-ordinated efforts to get depositors to decide it is not worth keeping their money in banks.
The reason, you seem to be saying, is that is just what banks do. That doesn't to me, answer the question "why?".


----------



## Jim2007 (20 Oct 2012)

Gervan said:


> You come across as rather hostile, when all I was doing was asking for another reason for what I see as possible co-ordinated efforts to get depositors to decide it is not worth keeping their money in banks.
> The reason, you seem to be saying, is that is just what banks do. That doesn't to me, answer the question "why?".



One of the basic problems with Irish banks is that they are using short term deposits to fund long term lending - mainly mortgages.  I expect that this is an attempt to redirect funds in to term deposits and similar products.

As to why you were not redirected to these products, I expect front line staff are simply burned out... it is the same all over Europe.  Front end staff are usually the lowest paid staff in the bank and the have been taking it brunt of the publics displeasure for the last 5 years and now they are facing more job losses.  The majority of them are also in same position as the clients they are servicing or even worse in that they have borrowed more at staff rates and of course they loose these rates with the job losses...  Over here (Switzerland) some of the banks have had to put the glass screens back up on the counters because people were coming in and spitting at staff!!!


----------



## Lightning (21 Oct 2012)

Hi Gervan,

Sorry, no hostility intended!  I just want accuracy and don't like incorrect claims. 



Gervan said:


> Hi Ciaran,
> the AIB account was a Personal Savings Plan. Up till now I have been able to deposit and withdraw without limit. Now I am restricted as to the amount I can put in, which as I say, meant I had to redirect incoming funds to a different bank.



There have always been restrictions with the AIB Online Personal Saver Plan. It is a regular saver product with a cap on deposits of 1,000 EUR per month. 

Conditions below:



> *AIB: Online Personal Savings Plan*
> Year 1: *2.50% - 2.75%* up to €12,000.
> Year 2: *2.50% - 3.00%* up to €24,000.
> Year 3: *2.50% - 3.25%* up to €36,000.
> ...





Gervan said:


> The Ptsb is not a term deposit, but an AUD account. Even if it were a term deposit, to go from 4% interest to 0.2% is unusually drastic



The PTSB AUD rate is currently up to 5.00%. I suggest that you print a copy of this PDF and re-discuss the AUD options with PTSB.


----------



## Gervan (21 Oct 2012)

It wasn't an online AIB account, but a Personal Savings Plan opened in 2000. There were no restrictions up till now. From 26th October this was renamed a Personal Savings Plan 2, and per the letter I received, any lodgement in excess of €1000 a month would be rejected. This was quite some inconvenience for us, but the bank staff were totally unconcerned. 


The PTSB interest rates on the AUD deposit account are changing as from 14th December. The 5% you refer to will become 0.25%. 
Investec rates have dropped but are offering 3.8% on a one month notice account, so that's my option. Take funds out of the Irish bank to put in a UK backed one.

In another thread you are discussing the ending of the ELG and turning down the suggestion there could be large deposit flights from Irish banks as a result, but I'm not so optimistic. When I put the separate details together I get the feeling there is some organised intention behind, that I don't understand.


----------

