Banking with > 100k

Chris_5339762

Hi all,



Recently a family member sold property and after a bit of a legal wrangle to get the cash out of the buyer, is now sitting there with just shy of 300k in a bank account.


Now they know this is not the best thing to have, and came to me looking for advice for some reason.


They are with pTSB and have the 300k just in a current account.


Am I right in recommending that they set up accounts with AIB and with BOI (say) and put 100k in each, as then all 3x 100k are covered under the deposit guarantee scheme? If so, what is currently the cheapest way to transfer money between these banks and any tips on doing that?


Any other suggestions what to do with the cash, obviously its slowly deflating in value, but they want to use to to buy a house or renovate their own in future... or possibly move in with the girlfriend for a year to rent and THEN buy. Is just leaving it in a 0% account spread across 3 banks the safest place to keep it at the moment? Or is there any short term investing that can generate a few euros.


Thanks a million, wish it was me that was getting the 300k but thats life.

Sesame

It'll only cost the their usual bank transfer fee to transfer it to another account. Unless they chose the speedy option which can be about €20.
Good idea about the €100k limit across banks,make sure its Irish banks though as obviously Revolut etc is not included.
For good short term ideas, not sure there's many options, prize bonds usually mentioned on these threads.
It depends when they need access to the money, but would they invest in a property or business, play around with shares, or too risky?
I wouldn't leave it too long, ie over a year in the bank for deflationary reasons. If they need a home or renovations, I'd do it sooner than later. Useless there's a good reason to wait.

LuasSimon

Didn't know until recently Revolt are based in Lithuania and have hardly any employees if any at all in Ireland , is it any wonder so many redundancies in Irish Banks.

Graham

LuasSimon wrote: »

Didn't know until recently Revolt are based in Lithuania and have hardly any employees if any at all in Ireland , is it any wonder so many redundancies in Irish Banks.

Revolut are waiting for their license to be authorised by the Central Bank of Ireland.

Lithuania is a temporary measure to avoid Brexit.

EagererBeaver

LuasSimon wrote: »

Didn't know until recently Revolt are based in Lithuania and have hardly any employees if any at all in Ireland , is it any wonder so many redundancies in Irish Banks.

Were you under the impression they're an Irish operation?

Zardoz

Put 100k into Revolut ,ha ha ha .
Do not put any large sums into Revolut , they will freeze it and demand documentation of where the money came from.
Its not a proper bank either.

Jim2007

LuasSimon wrote: »

Didn't know until recently Revolt are based in Lithuania and have hardly any employees if any at all in Ireland , is it any wonder so many redundancies in Irish Banks.

Revolut posted a total loss of £106.5 million....

ted1

Sesame wrote: »

Good idea about the €100k limit across banks,make sure its Irish banks though as obviously Revolut etc is not included.
For good short term ideas, not sure there's many options,

N26 and other foreign banks have government guarantees

ted1

LuasSimon wrote: »

Didn't know until recently Revolt are based in Lithuania and have hardly any employees if any at all in Ireland , is it any wonder so many redundancies in Irish Banks.

High mortgage rates and being bailed out after screwing the Irish people is a good reason. I moved my accounts away from Irish banks where possible

Jim2007

ted1 wrote: »

High mortgage rates and being bailed out after screwing the Irish people is a good reason. I moved my accounts away from Irish banks where possible

This is just an aside, but:


When you can name a single bank shareholder that was compensated for their loss, you have a bail out.


The reality is that the state took over the banks and recapitalized them and as a result the taxpayers own large stakes in them. We need to build up those banks in order to sell them off and recover the taxpayers money. So why punish the taxpayer yet again, by enhancing the profits of the competitors???

LuasSimon

ted1 wrote: »

High mortgage rates and being bailed out after screwing the Irish people is a good reason. I moved my accounts away from Irish banks where possible

Thousands of ordinary Irish people are bank officials and had little to do with Lehman brothers - Anglo etc .
People give out when their local bank closes but are running to Revolut a bank based in Lithuania to save a few euro on fees and they no doubt will charge people in the future when they have everyone drawn in ?

ted1

LuasSimon wrote: »

Thousands of ordinary Irish people are bank officials and had little to do with Lehman brothers - Anglo etc .
People give out when their local bank closes but are running to Revolut a bank based in Lithuania to save a few euro on fees and they no doubt will charge people in the future when they have everyone drawn in ?

With a cashless society what requirement is there for a local branch ?

Darc19

Back to the op.

Definitely get that person talk to a financial advisor. Preferably someone who will charge a fee and not be looking at what commission they can earn.

I'd be looking at pension options. Put as much salary that is taxed at high rate into a pension and draw down some of the 300k each month to make up the drop in net income

It's even worth doing this and taking a mortgage (60% ltv, 1.95%)

dmn22

Jim2007 wrote: »

Revolut posted a total loss of £106.5 million....

They are losing money because they’re in their growth stage, looking to expand and gain as many new customers as possible.

Once they have those users they’ll then look to monetise them by pushing more services like loans etc.

Chris_5339762

Thanks for all the advice folks, some good info to give them here. No easy option really by the looks of it - they're risk averse as they need access for when they buy a house. But we'll see.

Amirani

Phishnet wrote: »

As an aside, the corollary of this is, can you name a single senior banker in Irish Banking that lost their gold plated pensions, for lending recklessly and displaying a total lack of corporate governance. I expect the answer will be no.

Also, why were the carpet baggers, the bond holders not burned, why did it have to be the shareholders?

Do you lose your pension when you don't do your job well? Or is it just banking sector employees that should be exempt from employment law protections?

Shareholder capital gets burned before other creditors, that's standard for all businesses, not sure why you think they should be protected over bondholders. Bond holders were pari passu with depositors. It would have been illegal to burn senior bond holders without also burning old Mary down the street on her pension savings.

Even if bondholders were burned, a massive re-capitalisation would have had to take place anyway, as the asset values had fallen through the floor (and much of the senior debt was held by other Irish financial institutions...).

agent_88

I would consider buying prize bonds, max is 250k and gov guaranteed. No fees and 7 days notice to get your money back.

Jim2007

Amirani wrote: »

Do you lose your pension when you don't do your job well

Amirani wrote: »

Even if bondholders were burned, a massive re-capitalisation would have had to take place anyway, as the asset values had fallen through the floor (and much of the senior debt was held by other Irish financial institutions...).

Actually if the bond holders were burned, then you probably would have lost your pension or there would have been another big hole to fill. I think by now there are plenty of lists on the internet of who the bond holders actually where. I'm familiar with many of the names on the list and they don't hold bonds on their own account, they hold them on behalf of Irish pension funds, institutions, public bodies and financial products sold to the Irish public. A bit likeLloyds back in '91 where every syndicate thought they were save and were happy to see the others burned. Turns out they burned themselves.

Jim2007

agent_88 wrote: »

I would consider buying prize bonds, max is 250k and gov guaranteed. No fees and 7 days notice to get your money back.

It will be interesting to see what happens there if negative interest rates become prevalent.

billyhead

State Savings such as Certs and Bonds should be what your looking at.

podgeandrodge

Chris_5339762 wrote: »

Hi all,



Recently a family member sold property and after a bit of a legal wrangle to get the cash out of the buyer, is now sitting there with just shy of 300k in a bank account.


Now they know this is not the best thing to have, and came to me looking for advice for some reason.


They are with pTSB and have the 300k just in a current account.


Am I right in recommending that they set up accounts with AIB and with BOI (say) and put 100k in each, as then all 3x 100k are covered under the deposit guarantee scheme? If so, what is currently the cheapest way to transfer money between these banks and any tips on doing that?


Any other suggestions what to do with the cash, obviously its slowly deflating in value, but they want to use to to buy a house or renovate their own in future... or possibly move in with the girlfriend for a year to rent and THEN buy. Is just leaving it in a 0% account spread across 3 banks the safest place to keep it at the moment? Or is there any short term investing that can generate a few euros.


Thanks a million, wish it was me that was getting the 300k but thats life.

And to add....the deposit guarantee is €100,000 per person per bank, so they are covered for a total of €200k in PTSB out of whatever they hold there, even if in joint accounts.

Jim2007

Public policy is better suited to another forum