Expiry of Business Deposit Guarantee

There have been a few interesting mentions regarding the expiry, at the end of this month, for corporate deposit guarantee in the media in recent days.

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Anglo has called on the blanket guarantee – for short-term corporate deposits at least – to be extended. It wants to avoid the loss of more deposits, particularly those provided by companies with which the bank has long-standing relations.

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larger corporate depositors pull out, with the possibility of the guarantee on their money lapsing by the end of September.

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How are business posters reacting to the expiry of the guarantee? Are you moving deposits of keeping them with as un-guaranteed deposits ?

My understanding is that if I open a longer term corporate deposit account (eg 1 year) before the guarantee lapses that the sum is covered by the guarantee for the term.

Anyone know if this is correct?

thanks

For personal deposits, yes.

For corporate deposits, no.

The guarantee has different rules for corporate deposits.

Thanks Ciaran.

The guarantee faq I found on the deptoffinance site (not allowed to post links) doesn't distinguish between corporate and personal but it doesn't address fixed term deposits.

Can you direct me to a gov doc that explains the treatment of corporate deposits?

thanks

from the Credit Institutions (Eligible Liabilities Guarantee) Scheme FAQ (not allowed to post links):

4 What guarantee applies for corporate deposits?

The ELG Scheme applies to corporate deposits in the same way as for retail
deposits until 29 September 2010.
Thereafter, the ELG Scheme will only apply to corporate deposits with a
maturity of 3 months or more made with a participating institution from 30
September to 31 December 2010. Fixed term corporate deposits with a
maturity of less than 3 months and on-demand corporate deposits (as well as
inter-bank deposits) will not be covered by the ELG Scheme if made post-29
September 2010.

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so it seems a 1yr fixed term corporate deposit made up to 31 Dec 2010 is covered.

A 1 year term deposit opened by a coporate customer on December 30th 2010 is not covered for the full term.

Thereafter, the ELG Scheme will only apply to corporate deposits with a
maturity of 3 months or more made with a participating institution from 30
September to 31 December 2010.

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More on the expiry of the corporate guarantee in the Sunday Business Post today ...

There is one exception. The guarantee on short term corporate deposits of less than 90 days runs out at the end of the month, and is also the subject of discussion with the EU.

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So it looks like the government are asking for EU approval to start a new corporate guarantee after September 28th 2010.

Deposits

I am still very confused. I visited EBS and quite frankly the guy behind the counter seemed less clued in than me which is saying something!!.I have 300k which I wish to deposit at the best rate. I had understood that if I put 200k in EBS on the 5 month3.6% rate half would be covered by the Government (ie,100k) and the balance would be covered by the new ELG guarantee to which EBS is signed up? Is this correct. Also I thought I would put the balance into the Post Office as I doubt I will need it any time soon but again am confused as to which Post Office account is best. I understand the ten year deposit account but am unsure of which of the other deposit accounts would suit me best. Any advice would be greatly appreciated

If your deposit is
1) a personal deposit AND
2) It is opened before December 31st 2010 AND
3) It has a maturity date inside the next 5 years AND
4) It is opened with AIB/Anglo/INBS/BOI/EBS/PTSB etc.

Then it is covered by the guarantee.

Hence,
The EBS 5 months deposit is covered.
The State Savings 10 year term deposit is not covered but it is 'state guaranteed'.

Lenihan asks EU to allow State guarantee large Anglo deposits

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The request comes three weeks before the Government guarantee of short-term commercial deposits in six participating institutions expires.

Such deposits are particularly sensitive to any change to the scheme as they are typically overseen by professional managers who are considered likely to move their money elsewhere if State protection is not extended.

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That answer's that, [broken link removed]

Corporate deposits are now protected until December 31st 2010.