– RaboDirect Ireland to close online savings accounts in Irish market on May 16 – RaboDirect holds over €3 billion in deposits from its 90,000 Irish customers – Irish savers now exposed to still indebted Irish banks and bail-ins – Marian Finucane heard recently that buying gold is for “ordinary people” and not just for “rich and posh people” – By owning gold “if banks go belly up again you would be covered” – Finucane – Bonkers.ie David Kerr mentions “one of note” GoldCore and GoldSaver – Depositors with deposits over the government guarantee in the covered institutions are vulnerable and Marian says “after that goodnight, good luck and goodbye”
RaboDirect, the online savings bank, is set to close the deposit accounts of all 90,000 customers by May 16. Rabodirect’s 90,000 depositors have more than €3 billion on deposit with the bank.
Rabobank is an A+ (S&P) rated Dutch bank and thus Rabodirect had the highest credit rating of any bank in the Irish savings market and thus was the safest savings option in recent years.
The online bank established itself in Ireland in 2005 and grew its deposit base rapidly, especially during the Irish financial crash which saw Irish banks nearly go bankrupt and having to be bailed out by the Irish government.
RaboDirect has begun to inform all customers of the ‘actions they need to take’ and what they need to do before 16 May. Rabodirect said it wants to make the process as straightforward as possible for customers to close their accounts and transfer their savings securely to other financial institutions.
One of the actions RaboDirect clients should consider it to allocate some of their cash to physical gold.
The RaboDirect exit is very disappointing as it was the safest bank in Ireland and many of our clients had an online savings account with the bank. Other savings options in Ireland are much riskier. Some wags on Linkedin suggested that it might be time for the “bank of under the mattress.”
More prudent is to diversify your savings and reduce exposure to Ireland Banking Inc. and Ireland Inc. An allocation to gold (not paper gold but physical gold in ultra secure vaults in safer jurisdictions in the world) remains prudent as gold is a proven safe haven asset, a hedging instrument and delivers strong returns having outperformed blue chip stock market indices and safe haven bonds in the last 10, 20 and 40 years.
Marian Finucane understands the value of gold and had an interesting chat with Bonkers.ie Founder David Kerr on RTE Radio 1 on Saturday morning.
Marian raised the topic of buying gold and how buying gold is associated with very “rich and posh people”, but she was listening to someone being interviewed the other day who is not a hugely “rich and posh” person and that they said that “ordinary people” might buy gold.
Bonkers.ie founder David Kerr mentions that there are online platforms where you can buy gold and that there is “one of note called GoldCore where you can have a gold account which you can put money into and they can buy fractions of bullion on your behalf and they will store it for you or if you want to they can send you individual gold coins or gold bars.”
Marian then asks the million dollar or in this case the hundred thousand euro question; whether gold would protect savers if banks got into difficulty again?:
“So if the banks went belly up again … you would be covered?”
David answered yes “you would have a commodity and you would have a thing – even though it is quite volatile.”
David pointed out how depositors have the deposit protection scheme which covers individuals in covered banks and not all savings institutions in Ireland. The government “guarantee” is currently up to just €100,000 per person per institution. However, that could change and be reduced overnight as we discussed in our recent podcast.
He also pointed out that deposits over the government guarantee are vulnerable. To which Marian concluded with a pointed question “after that goodnight, good luck and goodbye…?”
David responded saying “kind of yes.” Marian then pointed out that this is “obviously not with people’s pensions one hopes … mind you they dipped into that as well and they changed the rules there.”
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