Money Guide Ireland

An overdraft is an additional amount of money that is drawn down from a current account when it is in debit. Overdrafts are generally a short-term facility used to temporarily increase your cashflow.

The Bank of Ireland current account overdraft rate is 14.8%  on authorised amounts – this is the highest of all the Irish banks. AIB is only very slightly lower at  14.79%
National Irish Bank has the lowest overdraft rate of  11.43%
(Figures as at March 12th 2010)

Banks also have interest surcharges for unagreed overdrafts – these can be as much as an extra 12% – bring the rate up to a fairly massive 26.79% in the case of AIB

As well as charging the highest rates – BOI and AIB also charge in the region of €25 for  putting  an overdraft facility in place and the same again to renew the facility. National Irish Bank, Permanent TSB, Ulster Bank have no overdraft set up  fees.

Overdrafts are best avoided if at all possible as they are an expensive way of borrowing money. If you go go overdrawn without a formal agreement – you will pay higher interest rates, plus additional fees.
You would pay lower rates on some credit cards – i.e AIB Click Visa is only 8.5% on purchases.

Instead of an overdraft,it would be worth considering a personal loan. See the lowest rates for personal loans .

We understand the following protection is in place with the following institutions: This is the latest information on the level of guarantee or protection for money held in Irish financial institutions or those operating in Ireland.
Updated January 2010

Allied Irish Banks plc (AIB) Irish Government guarantees all deposits to Sept 2010
Anglo Irish Bank Corp. Irish Government guarantees all deposits to Sept 2010
Irish Life & Permanent plc (PTSB) Irish Government guarantees all deposits to Sept 2010
Bank of Ireland - -Irish Government guarantees all deposits to Sept 2010
EBS Building Society Irish Government guarantees all deposits to Sept 2010
Irish Nationwide Building Society Irish Government guarantees all deposits to Sept 2010

Read more about the Extension to the September 2010 Guarantee here

Post Office Savings Bank;(Not Postbank) below. State body Irish Government guarantees all deposits (always did)

ACC Bank Irish Deposit Protection Scheme – 100% of deposits up to max. €100,000;
Bank of Scotland (Ireland) t/a Halifax Irish Deposit Protection Scheme – 100% of deposits up to max. €100,000;
Danske t/a National Irish Bank The Danish Financial Regulator While Danske t/a National Irish Bank is a branch of an overseas institution;the Minister for Finance has confirmed that savers with branches of overseas banks operating in Ireland will benefit from the enhanced €100k guarantee providing the branch concerned has confirmed its intention to the Financial Regulator to participate in Ireland’s Deposit Guarantee Scheme.;Irish Deposit Protection Scheme – 100% of deposits up to max. €100,000;

Credit Unions Irish Deposit Protection Scheme – 100% of deposits up to max. €100,000;
First Active plc Irish Deposit Protection Scheme – 100% of deposits up to max. €100,000;
ICS Building Society;Note: ICS is a subsidiary of BOI and can apply to Govt for full guarantee – but currently is under the Irish Deposit Protection Scheme – 100% of deposits up to max. €100,000;
IIB Bank Irish Deposit Protection Scheme – 100% of deposits up to max. €100,000;
Pfizer International Bank Europe Irish Deposit Protection Scheme – 100% of deposits up to max. €100,000;
Postbank Irish Deposit Protection Scheme – 100% of deposits up to max. €100,000;Full details here
Ulster Bank Irish Deposit Protection Scheme – 100% of deposits up to max. €100,000;

Credit institutions covered by other schemes

Rabobank The Dutch Central Bank Dutch Deposit Guarantee Scheme;100% of the first €20,000, 90% of the next €20,000.;Doubled for joint account holders.
Investec Bank (UK) Ltd The UK FSA Financial Services Compensation Scheme;100% of the first £50,000 per person.
Leeds Building Society The UK FSA Financial Services Compensation Scheme;100% of the first £50,000 per person.
Northern Rock The UK FSA Deposits held with Northern Rock are guaranteed in full by the Bank of England and HM Treasury.

With ECB rates still at an all time low – and with hints of a possible rise on the way because of EU inflation – is now a good time to fix your mortgage rate ?
Variable mortgage rates are still as low as as they have ever been – and some of the lowest  fixed rate mortgages are looking attractive if you can get them.

The lowest  3 year fixed rate available in Ireland now is  3.19% from AIB.
AIB also offer the best  5 Year fixed rate of  3.86% .
See the lowest 3 year fixed rates here – Lowest 5 Year fixed Rates here

If you are already with AIB on a variable rate mortgage  -  it should be just a matter of asking to go on to the fixed rate. There should be no fees to switch from variable to fixed with the same lender . Fixing your rate is not definitely going to be a better option for all borrowers – especially those already on a low variable rate or tracker rate.
If you need to switch lenders to get a good fixed rate – it might be more difficult and costly. Most lenders will only lend up to 92% of the value  of the property – so if the value of your house has fallen a lot – you may not be able to switch to a new lender. (more…)

Some recent  financial articles in the press are saying that now is a good time to fix your mortgage rate in Ireland because variable rates could be on the way up again.
It is failry unlikely that variable rates will drop anymore – so the only way they can go is up.
PTSB raised their variable rates a few weeks ago and this week EBS hinted that they might be increasing ariable rates in early 2010.
Some of these press articles are based on quotes from  mortgage brokers – who of course will probably benefit financially if borrowers switch lenders through them. With new buyers thin on the ground the brokers may be hoping to generate some income from switchers.

The best 3 year fixed rate mortgage available at the moment is 3.19% from AIB (Max LTV 92%). The same bank will give new customers with an LTV over 80% a variable rate of  2.65% .  That’s a difference of 0.54% . See current lowest 3 year fixed rate mortgages.
On a  €200k mortgage  over 25 years the repayments on the  2.65% variable would be €912 a month  . Repayments would be €968 on the fixed rate of 3.19%  – that’s €56 a month more.
Some lenders variable mortgage rates are already higher than the AIB fixed rate – NIB, Ulster, PTSB , KBC and Halifax are all above 3.19%.
The lowest  5 year fixed rate of 3.86% – is also available at AIB . See lowest 5 year fixed rate mortgages here.

Fixing your mortgage now for 3 or 5 years, hoping that this will cushion you against future variable rate rises – is a gamble. It might pay off or it might not. If variable rates remain the same for another year or 18 months and then rise only by 0.25% or 0.5%  – you will probably be worse off if  you fix now.  You will have the certainty of knowing what your payments will be for the next 3 or 5 years – which can be a good thing in itself.
Switching lenders to get a fixed rate will also incur legal and valuation costs which could well exceed any savings you might make.  Bank of Ireland are still offering 1000 euro towards switching costs if you apply direct and not via a broker.

Irish variable mortgage rates may rise even if ECB rates remain at 1%. As we wrote a few weeks ago – the mortgage rates in Ireland are lower than many other Eurozone countries – and with the banks looking to get back into profit the homeowners of Ireland may be hit with higher mortgage rates regardless of ECB rates.

The financial ombudsman in the UK has published some detailed figures about complaints made against financial institutions – and the outcome of those complaints. For the first time they have also published the names of the institutions involved – something the Irish Financial Ombudsman does not yet do .

Here are some figures from the UK on 2008/2009 complaints made about some UK companies with Irish connections or operating in Ireland . These figures may be of interest in the absence of similar figures from our financial ombudsman. Tesco and Northern Rock didn’t come out too well while Halifax Insurance had the least complaints upheld. (NB: These figures are nothing to do with their Irish operations – just the UK based ones)

Tesco Personal Finance 267 new cases   78% upheld
Northern Rock 593 new cases  78% upheld
Ulster Bank 67 new cases   76% upheld
Bank of Ireland 336 new cases  62% upheld
AIB Group UK 90 new cases  51% upheld
Quinn Insurance 67 new cases   45% upheld
Royal & Sun Alliance 372 new cases  36% upheld
Allianz Insurance 200 new cases   34% upheld
Halifax Insurance Ireland 74 new cases   27% upheld

There were a totalof 789877 initial enquiries made to the  UK  ombudsman which led to 127471 full blown cases.
The Irish Financial ombudsman had  3876 complaints in the first 6 months of 2009 – which equates to  7752 a  year.
This is about 6 % of the UK ombudsman complaints figure – which is broadly in line with the population differences between the UK and Ireland.

AIB may have the lowest mortgate rates – but this may be affecting the rates it can give savers. They have reduced the interest rate on the regualar saver account from 5% to 3.5%.  See our page of  Regular Saver Accounts  to compare rates with other providers.

Allied Irish Bank (AIB) have – as promised – passed on the latest ECB rate cut to all variable and tracker mortgages.

The new AIB 3.75% variable rate is  now the lowest variable rate mortgage in Ireland for LTVs over 50% . BOI match it on LTVs under 50%. BOI also have a discounted rate of 3.75% for 12 months  for other LTVs – rising after a year. See the Variable Mortgage Best Buys list .

AIB have also reduced the 1 year fixed rate for First Time Buyers to 2.99%

Following the latest ECB rate cut effective from Dec 10th – some of the Irish banks ahve already lowered their standard variable rates for new applicants as well as existing customers.
Bank of Ireland have the lowest variable rate of 3.75% at the moment. BOI are offering 3.75% for all LTVs and loan amounts at the moment. This is a discounted rate for 12 months.
The 3.75% is the actual rate on LTVs under 50%. On other LTVs the rate goes up after 12 months – but only as high as 4.1% (discount of 0.35%).
See full details of rates in our table of lowest variable rates here