Moving funds into different institutions.. Good Idea?

M

Maid up name

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Hi All,

A newbie poster here, so please bear with me while I ask the question that has probably been asked a million times weekly.

With the uncertainty that surrounds us in the current economic times, I, like so many others, am fast losing confidence in our banks and government.


I have been following the Best Buys thread with interest and have decided to move funds that are currently in AIB into different institutions.

Will someone please offer an opinion on the following?.

Rabo....
Nationwide UK...
AIB...

The other options I am looking at are..

Northern Rock,
An Post Savings Bonds / certs..
Goverment Bonds

I really do not want to tie up the money really but I can do if neccessary. I am much more concerned about safety and accessibilty as opposed to "high" interest, that said I do want at least 2%.

I am looking at depositing around 100k in total.

Even after reading all the informative posts here I still don't really understand Keytrade accounts etc... (Sorry!)

I am not adverse to diversifying further but I do not want to risk our savings either. I would really appreciate guidance.

Thank you
 
Rabo is AAA rated and covered by the Dutch deposit protection scheme (up to €100k), Nationwide UK & NR by the British protection scheme (currently £50 k and from 1st Jan 2011 €100k), and the remainder you mentioned by the Irish protection scheme also 100 k. No one can tell you where to put your money, that has to be your call alone. However if as you state you are "fast losing confidence in our banks and government", then this does seem at odds with your view to still consider AIB, An Post & Gov bonds (Irish I presume) as valid options.

You say you don't want to risk your savings and specify a minimum of 2% interest, and you are perfectly correct in trying to maximize your return as risk free as possible. However, whether your money is backed by Ireland England Holland or Germany for that matter, there is always going to be some element of risk, which I suppose increases directly in proportion to the interest rates offered, ie the higher the rate, the higher the risk. Look at the relative higher rates being offered by Anglo INBS & EBS for example, or look at the Irish bond rates compared to Germany's.

The Keytrade account you referred to is probably Keytrade bank which is a Belgian online bank where some posters have opened accounts. One of the reasons for this, is probably because even though your Rabo, NR or NWUK a/c is backed by their respective government's deposit guarantees, the accounts are still technically held in Ireland and subject to any Irish legislation, either existing or yet to be enacted. If the gov coffers really were to be empty some day... and the national interest was at stake ....?
And on top of that there's also been talk of us possibly having to leave the euro at some point, and what would that mean if all our euros in Ireland suddenly became Punt Nua overnight at a much devalued rate?

Of course none of these doomsday scenarios might ever happen, and down the road we'll all be kicking ourselves for having put our cash into low yielding "safe" accounts, so either way there's a risk. Welcome to the site and just keep following the threads, as lots of people have lots of different views.
 
Can anyone tell me if the ulster bank is cover by the UK guarantee scheme.
 
Thank you so much Bcommercial for the informative reply.


Looking at it then am I right in saying that all the above, even though are coming in under different guarantee schemes basically are still operated under Irish legislation?

So worst case scenario and the IMF moves in and we are thrown out of the euro and the punt nua arrives , are all deposits are then devalued regardless of which goverment scheme is the guarantor? (Hope I am making sense!)
 

Yes in each case. My understanding would be that accounts opened and held here in Ireland would fall under Irish jurisdiction. However, don't necessarily equate the IMF moving in with us being "thrown out of the euro", as this might in fact strengthen our ties to the euro and some would view this scenario as quite positive for the security of their euro savings.
 
So going back to my original query, am I still in your opinion doing the right thing in spreading the deposits across different banks?

Rabo , NWUK and maybe AIB ( just really for ease of access at branch level).
 
Armada said:
So going back to my original query, am I still in your opinion doing the right thing in spreading the deposits across different banks?

Rabo , NWUK and maybe AIB ( just really for ease of access at branch level).
Click to expand...

Spreading risk is usually a prudent option, but which banks?...Irish banks in Ireland, foreign banks operating in Ireland or foreign banks external to Ireland?

Each of the above options has it's associated risk elements, eg Irish banks need the gov guarantee to continue operating, but how dependable is this guarantee or the personal 100k deposit guarantee if things go pear shaped and we can't borrow in the new year? First port of call is then the IMF/EU stabilization fund, and from there on things are out of our control.

Foreign banks operating in Ireland would seem an even safer bet as their government deposit guarantees appear more confidence inspiring than ours (bond yields tell a clear story here), but in the event of some doomsday scenario happening these accounts still come under the jurisdiction of the Irish Finance Minister.

Foreign banks external to Ireland appear the least risky option, say a non-resident a/c opened in Germany as just one example, and you would need to research how to go about this. Remember the safer and more accessible (short term) you want the a/c to be, the less interest you can usually expect to earn (I'd say 2% tops and nothing like what you can earn at home)

A combination of all three options in varying degrees according to their risks would appear a sound option, but my idea of risk is subjective and you would have to come to your own conclusions based on your assessment of these risks and the probabilities of certain scenarios occurring in the future. There are also additional taxation issues with interest earned on foreign held accounts to be considered.

Best of luck in your endeavors.
 
Thank you again Bcommercial... you have been very helpful.

I was away from my own computer today and posted from my sisters iphone. She actually introduced me to this site.

I probably am too nervous to actually open a non resident account in Germany or such place so I think I will stick somewhat to what I know and hope that things workout.

Thank you.
 

Yes I was a bit confused by the different logon ID's so thanks for clearing that one up. I fully understand your nervousness and wanting to stick to what you know... but realistically...just hoping that things will work out might not be the cleverest option here. And what you know can change/increase with a little research and you might well then be in a better position to re-evaluate your strategy. In the meantime you could always check out this link to the institution you mentioned in your opening post.

http://www.keytradebank.com/en/banking/savings
 
I have just followed that link, Bcommercial for Keytrade Bank.

I think I will open an account with a small amount of money at first and perhaps use it as a standby facility.

Possibly I will use it to move funds into it quickly if the situation here deteriorates. I am normally quite level headed and not afraid of online banking really - I just needed someone to confirm that it really is a sensible and viable option in the present climate.

Thank you for your valued opinion. I am sure there are lots of other lurkers/posters on here who are gaining knowledge daily with unbiased and honest contributions such as yours.
 
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