Savings & debt in same bank get netted in a case of bank collapse?

[Betsy Og]

Have savings & mortgage in same bank - savings give me same (after dirt) return as mortgage int rate, both trackers - bit of a long story how that arose. So basically I'm not losing by having savings and mortgage at the same time - in fact it gives me liquidity which feels nice at the mo! And before the deposit guarantee I felt it meant that, at worst, I'd owe them the net debt and not lose my deposit.

Not one of the guranteed or even maybe guaranteed Irish banks.

While the deposit is safe, not >200k, joint account, I heard that if the bank went wallop they would net my savings against my debt and the net debt would be owed to whoever bought the mortgage book.

Is this correct?

If so then I think I should move "rainy day" money, say €30k, to one of the guaranteed guys, even if the return is a bit lower (can always lob it back in if the dust settles again ...... this may be some time !!).

 

[woods]

If the bank goes under your debt will stand and your deposit will be gone. I would move it.

 

[Sunny]

If the bank goes under your debt will stand and your deposit will be gone. I would move it.

I have posted on this subject on another thread if you do a search. Leaglly its not that straight forward.

 

[Betsy Og]

If the bank goes under your debt will stand and your deposit will be gone. I would move it.

Well my deposit is (I think) safe under the €100k p.p. deposit guarantee, its just that the bank itself is not subject to the overall Irish government guarantee.

But given that my deposit cant dissappear (due to 100k guarantee) I'm thinking the worst that would happen would be a netting of my debt and savings.

That's more or less what the savings are for anyway so it wouldnt be a catastrophe but I do like the liquiidity part and I certainly would not be comfortable without a 'rainy day' fund (albeit I should have a good bit of equity to release but hassle hassle hassle).

So I think i'll take out my 30k rainy day and leave the rest.

 

[Betsy Og]

Was talking to the manager of my bank (FA) and I'm told no netting off of my deposit (which is an a Money Market Fund) and my mortgage.

Also, if Ulster Bank go for this guarantee deal then FA also covered.

exhale........