Anglo Irish Looks Safe
Anglo Irish Bank had a rocky time last week, but the bank is now safe. Savers shouldn't lose any sleep.
Savers with Anglo Irish Bank should be happy this morning. The Irish government has announced that it will pump _1.5bn (£1.4bn) into the troubled bank.
The plight of Anglo Irish Bank is relevant to many UK savers as its Fixed Rate Bond is one of the top-paying fixed-rate savings accounts at the moment. It pays 5% interest which is fixed for a year although your money is locked up for 12 months.
Some savers may have been worried last week when both the bank's CEO and Chairman resigned last week for concealing loans. However, I'm confident that Anglo Irish will survive.
True, the bank will probably need more cash in 2009 and the Irish government is hoping that the private sector will cough up. However, I'm in little doubt that the government will provide the cash if private investors aren't willing to put money in.
If I'm wrong about that, all deposits at Anglo Irish are guaranteed by the Irish government. And if the Irish government is unwilling or unable to compensate savers, recent history suggests that the UK government will almost certainly step in.
Should savers stay with Anglo Irish Bank?
If you have savings with Anglo Irish Bank, I think it makes sense to leave your money there. I'd be very, very surprised if the bank went under.
But if you're of a nervous disposition, then by all means, switch your money. Government-backed N,S & I must be safe, and I think Nationwide and HSBC are also particularly sound organisations.
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To dav999 The reason that anglo irish savings are not NOW ( is that the but were previously covered by the UK scheme up to 50000) is that the European Union rules now prohibit the government of one country offering compensation ( their words !!) on any deposit if that is covered by a better compensation in another country. AS the Irish scheme covers all deposits in ANGLO iRISH UP TO SEPTEMBER 2010 in total , Anglo Irish falls out of the UK scheme .After 2010 the Anglo Irish scheme covers up to 100,000 euros , which scheme is then more generous may then depend on the euro /sterling exchange rate
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Anglo Irish bank has informed me that my savings with them is protected as below....( and not by UK ).... Thank you for your email. I hope that the below information regarding our comensation scheme will answer your queries. Please note that you will also receive this information in the post shortly. Savings Account update –deposit protection We are writing to advise you how your money is protected in your savings account with Anglo Irish Bank. In September 2008, the Irish Deposit Protection Scheme (“Irish Scheme”) was increased to €100,000 (circa £95,000 at 2 January 2009 exchange rates) per customer. Consequently, the protection you receive from the Irish Scheme is greater than that available under the UK Financial Services Compensation Scheme (“UK Scheme”). Under European law, banks which have a greater level of protection in their state of incorporation are not permitted to remain a member of the UK Scheme. Consequently, Anglo Irish Bank ceased to be a member of the UK Scheme on 28 November 2008. Your deposit is protected by the Irish Scheme and is further guaranteed by the Irish Government under the Credit Institutions (Financial Support Act) 2008 which was announced on 29 September 2008. Prior to received the above advice I believed my savings were protected by Irish and UK Government schemes. Dav999
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HSBC may well be sound, but have you seen their interest rates? I have an account with First Direct: like other Fools I find it great for service, but the online saver rates are nowhere near the best available at present. Maybe that's what you pay for security?
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16 January 2009