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.