BoI Launch Business Deposit Products Without Government Guarantee

BoI have launched an advertisement campaign for their new 'Premium' deposit accounts. I think this is the first, advertised, non-government guarantee, deposit product since 2008 (however, there have been a few targeted prior non-ELG deposit offerings).

The advertisements promise to offer high rates. The new products, like most BoI products, are T&C laden.

There is an interesting motivation behind the products. The products appear to be:
(1) An attempt to increase deposit rates prior to the 31 December 2012 proposed end of the ELG ('government guarantee') with locking in conditions to help prevent a deposit flight post ELG expiry.
(2) An attempt to boost business deposits which have been dropping lately.
(3) An attempt to get people used to the concept of non-ELG rates. Perhaps, to test the waters.

The full details:

• Product name: BoI Elevator Premium Account Issue 4
• Minimum deposit: €250,000
• Maximum deposit: €50,000,000
• Fixed rate for month 1 to month 3 of 2.42% if you want your deposit covered by the ELG OR
  Fixed rate for month 1 to month 3 of 2.73% if you do not want your deposit covered by the ELG.
• Fixed rate for month 4 to month 6 of 2.93% if you want your deposit covered by the ELG OR
  Fixed rate for month 4 to month 6 of 3.24% if you do not want your deposit covered by the ELG.
• Hence, blended AER of 2.67% (with ELG) to 2.97% (without ELG) over the 6 months.
• Open to new funds only.

[broken link removed] is only open to business deposits.

BoI have been offering non-ELG GBP deposits via the UK Post Office for some time at very high rates, thus using the UK as a proxy for high rate deposit gathering. This is the first advertised Irish non-ELG product. Progress?

Or you could buy a liquidity fund(daily priced no lock in) with an average credit rating of AA+ (Standard and Poors )spread across around 100 securities in multiple currencies substantially hedged back to Euro -I.e there really isn't much default risk here, but you are taking on some interest rate risk depending on the duration of the fund.

Now, I accept that investing in a fixed interest fund is not the same thing at all as a fixed term deposit account but given BOI's credit rating in the market (BB+ long term from S&P) they should be paying a lot more than they are offering here or you may as well just buy T bills and skip the default risk as you are not being fully compensated for the risk of them going bust.