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.
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.
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.
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