Anglo Irish Bank 5% one year fixed

O

oldtimer

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Reported in this mornings Irish Independent Anglo Irish Bank launched one year fixed term rate of 5% for amounts €1,000 upwards with no upper limit. Nothing on website.
 
Hmm... Could be interesting if the wave of reduction in the interest rates keeps going on... But at the moment quite a few instant savings a/c are still on 4.5%... Is it worth locking money for a year?
 
You all beat me too it, just read the same in the Irish Times! I have a 30 day notice account, can I just give the 30 days notice to move and they will do it for me or will i have to go throught the who account opening rigmarole if I choose to go this route?
 
Looks like it's time to set-up an Anglo-Irish account. Just about the only bank I don't already have an account with.
 
I found Anglo very helpful in the past in transferring accounts. In fact I was a customer of theirs a few years back but had closed my account and when I contacted them they still had my details on file (somebody will probably say that they were in breach of Data Protection rules in doing this ... ) so I didn't have to go through the full id checking rigmarole when opening a new account with them.
 

Just rang them. As always they were very helpful. i can just drop into a branch (I pass one on my way home) with a completed application form and transfer money. I was told i don't even have to give the 30 days notice as its going to another anglo account.
 
I agree, but their customer service is also very reliable as I could experience. The only thing I have to point out is that in many planned withdrawals with their free phone no. only one wasn't recorded in their DB when I called 30 days after to enquire about my withdrawal notice... Since then I also take note of the person I talked with and the day and time... Just to make sure!
 
E-mailed a mate about this rate, he has a few bob he wants to invest his reply was as follows:

One year Credit Default Swap for Anglo is 90bps... so you should be getting 90 over market rates to be properly compensated. 1 yr Euribor is currently 4.697%

Small bit of semantics for the very risk averse.
 
Can you translate it into English for mugs like me please? Does it mean that one should expect Euribor + 0.9%? Why? Because of some sort of credit rating (by whom) for Anglo?
 
Ignoring expenses and the security of the institution issuing the credit default swap the theoretical price is (roughly):

credit default swap fee = Anglo Yield - risk free yield.

Re-arranging: Theoretical Anglo Yield = risk free yield + credit default swap fee

Judging by the fact the credit default swap fee being traded in the market is .90% in order to adequately compensate an investor for the risk of default you should expect a yield of 4.697% + 0.90% (=5.597%) in order to hold the investment

This is the theoretical justification of the rate an investor should require to hold the investment. All this would also assume that personal savings markets are efficient (probably not an accurate assumption). the credit default swap fee is based on the credit rating of the institution (anglo) but will also be influenced by investors opinions on various fundamentals.

Wikipedia explaination of credit default swaps:

http://en.wikipedia.org/wiki/Credit_default_swap

"....for informed investors, CDS premiums can act as a good barometer of company's health. If investors are not sure about a firm's credit quality they will demand protection thus pushing up CDS spreads on that name in the market. Equity markets will then draw a cue from the credit markets and push down the stock price based on fear of corporate default...."
 
Just on a slightly lighter note regarding this new Anglo Irish Product, I've just heard the add on Radio 1 for it.

Is it my hearing defective or did the guy in the add actually refer to a rate of 5% APR.

For a savings product??

I thought AER was the appropriate calculation.

I'm sure this is what I heard. Listen up folks.
 
Looking at the T&Cs, it appears that 10% can be withdrawn before the 1 year is up without incurring a charge. This is good but am I reading this right? (Section 5)

[broken link removed]
 
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