Irish Banks Still Want your Money.
You might think that the Irish people  have already given the banks  too much money in the form of  the bailout – especially when you consider the massive profits of Irish banks in recent years .  The banks in Ireland are  still trying hard to  get us to deposit  our money into their savings accounts.

On our page of  the Best  Savings  Rates in Ireland   – you will see that you can get rates as high as 4.1% at a time when the ECB rate is just 1% .

If you are lucky enough to have some savings – then you should check if you are getting the best interest rate. Some deposit accounts pay as little as 0.1% a year !  If you had just €4000 and moved it to an account paying 4.1% – you could get enough extra interest in a year to pay the Household Charge and have a bit left over even after the 30% DIRT.

See more of our 2012 Money Saving Tips.

A few of the Irish and non Irish banks are trying to attract deposits with newspaper and online advertising .

Just today – a  Google search  for  “best irish interest  rates ” resulted in quite a few  adverts from banks. Rabobank , Nationwide UK (Ireland) and  KBC had the top 3 advert slots.
The government backed State Savings were also advertising their 3% rate. years.

The choice of banks in Ireland  has narrowed – with several recent takeovers  – the latest one being Northern Rock Ireland – it has been transferred to PTSB – and their 3.25% rate is no longer available to new customers.

Best Interest Rates 

There is only one truly free current account in Ireland – and that is offered by Ulster Bank.  The other banks make you satisfy certain criteria to qualify for fee free banking.

Bank of Ireland :   BOI criteria for fee free banking is

a) Lodge at least €3,000 into the account each quarter AND make nine payments from that account using either  phone or online services

OR b) maintain a minimum credit balance of €3,000 throughout the full quarter

The BOI fees are  28 cents for each of the following transactions:
Debit Card ; ATM  ;Standing order ;Direct debit  ; Cheque  ;Branch transaction ; Internet transaction ;   Phone transaction

So – someone with a BOI account that didn’t meet the fee free banking criteria – using a debit card twice a day , using the ATM three times a week, writing one cheque a week and with 5 direct debits a month , would be charged €68 in transaction fees in a quarter. (€272 a year)

PTSB charge a flat rate of €12.50 a quarter – but PTSB customers can avoid this fee if in each quarter they  :  lodge at least €3,000   AND  make at least 18 card purchases  AND make at least 1 financial transaction through online banking (Open24) AND  keep the account within agreed limits.

AIB are a bit more lenient . They offer no fee banking if customers  use their AIB debit card to make at least one purchase each quarter AND  make at least one debit transaction using AIB Phone or Internet Banking in each quarter.
If you don’t qualify for free banking with AIB – you will be charged €4.50 a quarter (admin) plus 20 cents for each of the following transactions:
Debit Card ; ATM  ;Standing order ;Direct debit  ;  Internet transaction ;   Phone transaction and 30 Cents for each Cheque  and Branch transaction.

NIB are almost free – they charge 34 cents for cheque processing if you have more than 6  per quarter. NIB also charge 34 cents for each non credit branch transaction above 6  per quarter.

Ulster Bank offer free current accounts. They have no admin fees or charges for any day to day transactions on current accounts.

All figures checked December 23rd 2010

Bank of Ireland announced  back in October 2010 that  in 2011  they were replacing Laser cards with Visa Debit cards.
They originally said it would happen  in the second half of 2011.  It looks like this may have been a ploy to stop customers leaving – because thay have only now announced that existing Bank of Ireland customers will receive  Visa Debit cards on a phased basis between January and June 2012.

Bank of Ireland say that from  31st January 2012 they will no longer issue Debit and ATM cards under the  Laser, Cirrus and Maestro schemes.

Are My Savings in Ireland Guaranteed?

(Updated  Dec 4th  2011 )

A potted history of Irish Banking Guarantees

First of all we had the Irish  Deposit Guarantee Scheme (DGS), which covered the first €20,000 per person in all the financial institutions that are authorised by the Irish Financial Services Regulatory Authority to operate in Ireland.

September 2008
The limit under this Deposit Guarantee Scheme  (DGS) was increased from 20,000 euro to 100,000 euro in September 2008 and Credit Unions were also included for the first time. This guarantee is still in place and does not have an end date.

Also In September 2008,  the Irish Government announced it would guarantee 100% of all deposits in the following  Irish banks and building societies:  AIB; Bank of Ireland; Anglo Irish Bank; Irish Life Permanent; EBS; Irish Nationwide Building Society; and Postbank.

This is known as the Credit Institutions (Financial Support) Scheme (CIFS) and this “guarantee”  was due to expire on  September  29th 2010.

December 2009

Just to confuse us all a bit more – on December 9th 2009 the Irish Government introduced the “ Credit Institutions (Eligible Liabilities Guarantee) ” (ELG) . The new guarantee excluded subordinated debt and extends to instruments with a maturity of up to five years.

It only applies to  those institutions that applied to join the scheme.
AIB, Bank of Ireland , Irish Life & Permanent ,Anglo Irish Bank , Irish Nationwide and EBS have  joined the ELG scheme.

This  new ELG scheme did not extend the guarantee for on-demand deposits past September 2010  – but it did  extend the guarantee for some fixed-term deposits for up to 5 years (2015) . To qualify for the new guarantee – the fixed term deposit must have been  placed with a participating institution after it has joined the ELG scheme and before September 29th, 2010.

June 28th 2010
In June The ELG scheme was extended to December 31st 2010 for  all retail deposits. Also – for  fixed term deposits – the cut off date for placing the deposit with with a participating institution was extended to 31st December 2010 .

(Other types of deposits and liabilities also had their guarantees extended to Dec 31st - but not Interbank deposits or short term (under 3 months) bank liabilities,  or corporate  deposits or short term  debt securities)

September 8th 2010

The  Minister for Finance  announced that the ELG was now extended  for the types of instrument that were  excluded from the extension announced in June 2010 – i.e short term bank liabilities, including corporate and interbank deposits as well as debt securities . The extension on these is also to 31 December 2010.

November 2010
The ELG – Eligible Liabilities Guarantee was extended to the end of June 2011

June 2011 – the Eligible Liabilities Guarantee was extended to the end of December 2011.

December 2011 – the Eligible Liabilities Guarantee was extended to the end of June 2012 .

For the majority of the general public with  savings accounts the main points to note are these:

Retail deposits  (On demand or fixed term) of up to €100,000 will continue to be covered under the Government’s deposit guarantee scheme which does not have an expiry date.

On-demand deposits of more than €100,000 are guaranteed until the end of Dec 2011  at AIB, Bank of Ireland , Irish Life & Permanent ,Anglo Irish Bank , Irish Nationwide and EBS

Fixed  Term deposits of more than €100,000, which pay an interest rate for a set period of time, are covered to the end of the fixed term up to a maximum of five years. The fixed term deposit must have been started  after the bank joined the ELG scheme and before July 2012  (Only at at AIB, Bank of Ireland , Irish Life & Permanent ,Anglo Irish Bank , Irish Nationwide and EBS)

So – the sensible thing to do if you have more than €100,000 on deposit with one of the Irish banks – is to either split it up into and spread it across other banks or move it into a fixed term deposit account with one of the “ELG” institutions before  the end of June 2012.

See a  Summary of Irish Bank Guarantees Here

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 in September 2011

Post Office Savings Bank; . Irish Government guarantees all deposits with no end date

Under the Deposit Guarantee Scheme – amounts of up to €100,000 are guaranteed in the following institutions (no end date on this)

Allied Irish Banks plc (AIB)
Anglo Irish Bank
Irish Life & Permanent plc (PTSB)
Bank of Ireland
EBS Building Society
Irish Nationwide Building Society
ICS Building Society
ACC Bank
Bank of Scotland (Ireland) t/a Halifax
Credit Unions
First Active
KBC (IIB)  Bank
Pfizer International
Postbank
Ulster Bank

Amounts over €100,000 are covered until the end of 2011 under the Eligible Liabilities Guarantee  (ELG) in the following six institutions :-

Allied Irish Banks plc (AIB)
Anglo Irish Bank
Irish Life & Permanent plc (PTSB)
Bank of Ireland
EBS Building Society
Irish Nationwide Building Society
ICS Building Society

Note - the ELG also covers fixed term deposit accounts to the end of the term (max five years)  as long as the deposit was made before the end of  2011 and after the date the institution joined the ELG scheme (most joined  in Jan 2010)

Credit institutions covered by other schemes

Danske t/a National Irish Bank The Danish scheme covers up to Kr300,000 or approx. €40,000. The balance up to €100,000 is covered by the  Irish Deposit Guarantee Scheme

Rabobank The Dutch Central Bank Dutch Deposit Guarantee Scheme; 100% of the first  €100,000 per person..

Investec Bank (UK) Ltd The UK FSA Financial Services Compensation Scheme;100% of the equivalent of €100,000 per person.

Leeds Building Society The UK FSA Financial Services Compensation Scheme;100% of the equivalent of €100,00 per person.

Northern Rock the  equivalent of €100,00 per person. is  protected under the UK Financial Services Compensation Scheme .

Nationwide (UK) Ireland
The UK FSA Financial Services Compensation Scheme;100% of the equivalent of €100,00 per person.

Banks are always trying to attract students with various offers and  incentives. The banks know that once they get a customer  – the majority will remain with the same bank for many years to come.
The big three Irish banks AIB , Bank of Ireland and Ulster Bank all have special deals to try and attract  students

Ulster Bank -  offer an Interest-free overdraft of upto €1500. You must be an existing customer with a current account with Ulster Bank for 12 months to apply for a student overdraft of up to €750 or you must be in receipt of a grant to receive up to €1,500 (dependent on your grant level).
Ulster Bank issue  Visa Debit cards- which is another good reason to choose Ulster Bank. (Much easier for online shopping) . Ulster offer Free banking for all – including students.

Bank of Ireland is offering a free return flight to new third-level students who open an account with them. The flights leave from Dublin and Cork to London, Paris, Barcelona, Edinburgh, Liverpool, Stockholm, Brussels, Berlin, Amsterdam and Rome. Students have to open an account before October  31st 2011  and then use the account ten times before the end of October 2011.
BOI offer interest free overdrafts for the first 9 months – in case your grant payment is delayed.. BOI banking is free for students – but beware of the charges BOI  make once your student day are over.

AIB are offering a voucher for a free student travelcard (worth €12). They also offer interst free overdrafts of up to €1500

Back in February 2011 – Bank of Ireland announced changes to the fees charged on their current accounts. At the time it made some of the the newspapers   -  but many BOI customers probably forgot about it until they got their quarterly statements.
Some customers of BOI have been charged up to €50 in  transaction fees in the first quarter . Second quarter fees may well be even higher because the changes were only introduced from Feb 21st 2011.
Current Account Holders at Bank of Ireland are exemp from transaction fees ONLY IF they ..

a) Lodge at least €3,000 into the account each quarter AND make nine payments from that account using either  phone or online services

OR b) maintain a minimum credit balance of €3,000 throughout the full quarter.

If customers don’t meet the criteria – the transaction fees will be   28 cents for each of the following transactions:
Use of Debit Card  (Laser)
Use of  ATM
Standing order
Direct debit
Cheque
Branch transaction
Internet transaction
Phone transaction

So – someone  with a BOI account using a debit card twice a day , using the ATM three times a week,  writing one cheque a week and with 5 direct debits a month  ,  would be charged €68  in transaction fees in a quarter. (€272 a year)

Prior to Feb 2011  to avoid fees – BOI customers had to only maintain a minimum credit balance of €500 in their account for the entire fee quarter
OR b) Make 3 or more  payments each quarter from their current account using either phone banking or online banking.

See More details of the other Irish bank’s fees and where to get  free banking in Ireland

Mortgage lending in Ireland has fallen dramatically since the height of the property boom.
The number of Irish mortgage lenders has fallen – with the loss of Halifax , Bank of Scotland , Irish Nationwide.
A few mortgage providers in Ireland are actively advertising  their mortgage products – they are KBC ,  Allied Irish Bank and Bank of Ireland.
There are reports that a high percantage of mortgage applicants are getting refused – and criteria are much stricter than they were a couple of years ago.

How Much of a Mortgage Will You Get?

KBC say the  maximum mortgage they will give  is 90% of the property value.
They also say that as a general rule, mortgages are subject to monthly repayments of up to a maximum of 50% of disposable income and will vary according to individual circumstances.  Disposable income will be take home pay less any other loan repayments.

Bank Of Ireland say they will lend a maximum of  92% of the property value.  The BOI website is confusing though – it states “ as a general rule, loan amounts are subject to monthly repayments not exceeding 4/5 times an individual’s gross annual income are considered, and will vary according to individual circumstances. “
It looks like a typo – and probably means that the loan will not exceed 5 times gross income.

Allied Irish Bank have a maximum loan to value of  92% of purchase price or valuation whichever is lower.  AT AIB  lending levels are subject to monthly repayment burden, typically not exceeding  35% of borrowers disposable income and will vary according to individual circumstances.

NIB State that borrowing is subject to 40% of net income being available to meet capital and interest loan repayments, and is subject to a 2% interest stress test.

EBS - say the maximum loan to property value with EBS  is 90%  As a general rule the loan amount should not exceed 3 times the main income or 3 times the joint incomes (in the case of two earners)

On the BOI website they have  a mortgage calculator where you can see how much you might be able to borrow. If you enter a single income of €3600 – it calculates that the maximum mortgage you could get is €162000 euro. (It works out at 4.5 times gross salary) That would be enough to cover 90% of a house worth €180,000 – (leaving a deposit to be found of €18,000) .  The  monthly  repayments on a €162000 mortgage over 25 years at  3.54% APR   would be €809

The KBC mortgage calculator came back with a maximum mortgage of just €143,397 with a single income of €36000 a year. But there may be a problem with their online calculator – because an income of €39999 resulted in a max mortgage of €196,629 while a €40000 income resulted in a mortgage figure of  €181,455

In general terms – to be accepted for a mortgage offer you will need to be permanently employed in  “sustainable employment”. Banks will only lend if they believe your employer will be around in 12 months’ time or more.

If you are self-employed – you will need to have been trading for a minimum of two years.

If you are in contract employment or temporary employment other than in the medical profession, it will be difficult to secure a mortgage.
You also need to have evidence of savings built up over a at least a 12-month period to demonstrate your ability to make the repayments.  A big gift from a parent may not be enough.

If you are renting  , banks will consider paying rent as similar to saving.