Over two million of us including Post Office customers, whose accounts are provided by the Bank of Ireland have cash in Irish banks. So how safe is it?
The good news is that the vast majority of deposits in Irish banks are covered by guarantees of one kind or another. If you have money in a 100% Irish-operated bank, such as Anglo Irish, you are covered by the Irish Deposit Guarantee Scheme (DGS), up to €100,000 per person, per institution.
And until June next year most accounts are also still covered by the Irish government's Eligible Liabilities Guarantee (ELG). This protects 100% of deposits (provided the guarantee is honoured). After June 2011 the new European-wide limit of €100,000 will apply. Note that Allied Irish Bank operates a UK-authorised subsidiary. Deposits there are also covered by the UK Financial Services Compensation Scheme up to £50,000 per person (so that's £100,000 for a joint account).
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
What about Post Office products that have been supplied by the Bank of Ireland? On 1 November, the Bank of Ireland moved Post Office customers to its brand-new Bank of Ireland UK subsidiary. So now the first £50,000 of deposits (note that separate Bank of Ireland and Post Office accounts are lumped together) are covered per person under the Financial Services Compensation Scheme (FSCS) rules. From 1 January 2011 this rises to €100,000 under the new European rules. But cash deposits and fixed-term accounts (provided it was opened after 11 January this year) are also covered by the ELG.
So the overall message is simple don't panic. There's little point in rushing to withdraw money that is protected. But there is no time like the present to double-check the location of any money you may have in Ireland.
-
Tesla seeks approval to supply electricity to UK homes – could it disrupt the energy market?Tesla has applied for a license to supply UK households with electricity, but taking on the biggest providers could prove challenging
-
Most Brits unaware onshore bonds can help beat inheritance tax – here’s howA little-known perk of certain types of bonds can let your loved ones off the hook when it comes to inheritance tax – but two-thirds of people have never heard of them
-
What is Islamic finance?Sharia-compliant or Islamic finance banks regularly offer great rates for savers, but how do they differ from Western banks?
-
Smartphone banking: the best app-based bank accountsNews App-based banks are convenient, come with features that help you budget and make banking easy. What are the best app-based accounts available now?
-
Don't buy pre-paid funeral plans, save for death insteadAnalysis Funerals are costly, but pre-paid plans have not been a reliable way to prepare for them. Set up your own savings instead, says Ruth Jackson Kirby.
-
Beware of expensive pre-paid funeral plansAdvice Farewells are expensive, so many people opt for package deals. But they can be opaque and pricey, says Ruth Jackson-Kirby.
-
Beware of cash Isa scamsFeatures Fraudsters have been targeting savers by offering unrealistically high interest rates on cash Isas.
-
P2P default rates on the riseFeatures Raising default rates from loans made in 2014 have caused some investors in the peer-to-peer lending sector to start to worry. Matthew Partridge reports.
-
How safe is your Sipp?
Features How big of a risk does the collapse of an investment firm pose to your pension? Natalie Stanton investigates.
-
Should you worry about the Co-op Bank?
Features Ratings agency Moody's recently downgraded the Co-op Bank. If you have an account with the bank, should you be worried, and what should you do? James McKeigue reports.
