Fixed V Access Accounts.

Hi All,

Due to the present state of the banks and after what happened in Cyprus is it safer to put a large deposit in a fixed or access/short term account? Or if there was a run on the banks would it make any difference? And is the Irish Deposit Guarantee still in place for what its worth?

Hi Gatekeeper

Things look a lot better now, than they did a few years ago.

However, the future is still uncertain. Taxes change. The financial system could collapse.

And personal circumstances change. You might get a deal to pay down your mortgage. You might want to buy a house.

You should stay as flexible as possible so don't put your money into accounts which you can't access immediately and without penalty.

Brendan

Fixed V Short Term Access Account.

Thanks for that Brendan. Short term Access it is then.

Gatekeeper said:

Hi All,

Due to the present state of the banks and after what happened in Cyprus is it safer to put a large deposit in a fixed or access/short term account? Or if there was a run on the banks would it make any difference? And is the Irish Deposit Guarantee still in place for what its worth?

Click to expand...

Deposits are guaranteed by the Irish state up to 100,000 EUR but not beyond.

Keep in mind that some fixed term products allow access subject to a penalty.

If anything with Cyprus has told us its that the guarantee isn't worth much. Remember they originally wanted to hit small depositors as well and didn't see any issues with it. A capital levy on deposits stills gets mentioned in Europe every week or so.

Fixed Deposits V Access

Hi Ryaner,

What does a levy on deposits mean? Presumably that they can access your account if they so wish and deduct funds from it? Talk on the radio this morn about Banks having to fund themselves now, that a fund of 50 million I think they said being set up to cover all European banks, and that would not even sort Anglo Irish Bank never mind the others. And also that Europe as a whole would have a greater say in which banks were to be wound down or allowed to operate. Have read that the Canadian banks are some of the most secure at the mo but not sure if it would be a good idea to put some money into them. Presumably would have to change euros into Canadian dollars and don't know much about currency differences. Not sure either if you can do an electronic transfer from here to those banks but I think you can. Have some relatives there so that might make it easier. Hard to know what to do.

Gatekeeper, look at the numbers, to help you decide.

The pension levy was 0.6% (0.75% this year) so work on a possible levy on bank deposits of 1%.
Interest rates here, low as they are, are still higher than you can get most places. Work out what after-tax interest you would get in the Canadian (for example) bank, and compare that with after-Dirt and post (estimated) levy deposit income here.

If the overseas option still seems more rewarding, then you still have to imagine what currency exchange rate changes there could be. How much of a drop before your foreign currency option looks the worse?

Yes, it's all supposition, but instead of floundering, you have put some numbers down and feel more confident in whichever approach you choose.