Stash The Cash

[chiang mai]

I presume that the guarantees on the fixed rate bonds are the same as for ordinary savings/deposit accts?

7.2% is a rather attractive interest rate.

what fixed rate bonds are you talking about? who is the debtor? note: bonds are NOT deposits!

Precisely my point. The Anglo Irish Bank IOM are offering 1yr fixed rate bonds at 7.2%

Better interest than their ordinary accts but are they guaranteed this is the question.

The debtor is the issuing financial institution, aka Allied Irish. I perhaps need to phrase my question to them about guarantees slightly differently, I will try to bottom this and come back to you although I am very comfortable that the bonds are covered.

[chiang mai]

I presume that the guarantees on the fixed rate bonds are the same as for ordinary savings/deposit accts?

7.2% is a rather attractive interest rate.

what fixed rate bonds are you talking about? who is the debtor? note: bonds are NOT deposits!

Precisely my point. The Anglo Irish Bank IOM are offering 1yr fixed rate bonds at 7.2%

Better interest than their ordinary accts but are they guaranteed this is the question.

And the answer is:

The Irish Government today announced (30th September 2008) that they have put in place with immediate effect a guarantee arrangement to safeguard all deposits (retail, commercial, institutional and interbank) covered bonds, senior debt and dated subordinated debt (lower tier II). The guarantee will cover all existing aforementioned facilities with Irish institutions including Anglo Irish Bank Corporation plc and all related deposit taking subsidiaries (including Anglo Irish Bank International). The guarantee is for a two year period until 28th September 2010.

(from their IOM website)

[Naam]

I presume that the guarantees on the fixed rate bonds are the same as for ordinary savings/deposit accts?

7.2% is a rather attractive interest rate.

what fixed rate bonds are you talking about? who is the debtor? note: bonds are NOT deposits!

Precisely my point. The Anglo Irish Bank IOM are offering 1yr fixed rate bonds at 7.2% Better interest than their ordinary accts but are they guaranteed this is the question.

any bank of good standing can refinance GBP debt at prevailing GBP market rates (6.5188% p.a.). any bank which offers interest rates above market rates has to be treated with great suspicion.

U.K. government bonds, maturity 1 year yield presently 3.80%! how come "guaranteed" bonds of a debtor (which definitely does not have the rating of the United Kingdom's Treasury) can offer a 90% higher yield?

http://www.bloomberg.com/markets/rates/uk.html

[Naam]

And the answer is:

The Irish Government today announced (30th September 2008) that they have put in place with immediate effect a guarantee arrangement to safeguard all deposits (retail, commercial, institutional and interbank) covered bonds, senior debt and dated subordinated debt (lower tier II). The guarantee will cover all existing aforementioned facilities with Irish institutions including Anglo Irish Bank Corporation plc and all related deposit taking subsidiaries (including Anglo Irish Bank International). The guarantee is for a two year period until 28th September 2010.

(from their IOM website)

"covered bonds" are special bonds having an underlying security of either public debt or mortgages on real estate (not highly depreciable assets such as machinery). is the bond yielding 7.20% a covered bond?

if yes then my qestion "U.K. government bonds, maturity 1 year yield presently 3.80%! how come "guaranteed" bonds of a debtor (which definitely does not have the rating of the United Kingdom's Treasury) can offer a 90% higher yield?" is still unanswered.

[cmsally]

Naam has again asked the question that's on my mind!

While another part of my mind says stuff it and go for the 7.2% interest

[philstone]

I use Anglo Irish and believe me have been trying to get to the bottom of it.My Money is in the Isle of Man and is safe under the Irish Governments 2 year thing.Guess that means offshore.

EPG.

Never check these banks are fakes you will be crying soon.

They are all owned by New York Bankers

[chiang mai]

I presume that the guarantees on the fixed rate bonds are the same as for ordinary savings/deposit accts?

7.2% is a rather attractive interest rate.

what fixed rate bonds are you talking about? who is the debtor? note: bonds are NOT deposits!

Precisely my point. The Anglo Irish Bank IOM are offering 1yr fixed rate bonds at 7.2% Better interest than their ordinary accts but are they guaranteed this is the question.

any bank of good standing can refinance GBP debt at prevailing GBP market rates (6.5188% p.a.). any bank which offers interest rates above market rates has to be treated with great suspicion.

U.K. government bonds, maturity 1 year yield presently 3.80%! how come "guaranteed" bonds of a debtor (which definitely does not have the rating of the United Kingdom's Treasury) can offer a 90% higher yield?

http://www.bloomberg.com/markets/rates/uk.html

Naam, if you look at the Sterling deposit rates offered by many UK lenders both on and offshore you will see that the trend has been in recent times to offer deposit rates that offer a premium to the customer - the rates on offer are often closer to Libor plus a premium in order to gain retail deposits. There's nothing really that shifty about the practice since what they are saying in essence is, it's cheaper for us to pay a premium on a retail deposit than to pay the extra to borrow money from other banks, if they can find it! The banks who don't pay such premiums are the ones that are not in such great need of retail deposits such as Northern Rock (UK government owned) and HSBC. BTW, the 3.80% yield you quote on government bonds is an after tax figure I would guess.

[chiang mai]

And the answer is:

The Irish Government today announced (30th September 2008) that they have put in place with immediate effect a guarantee arrangement to safeguard all deposits (retail, commercial, institutional and interbank) covered bonds, senior debt and dated subordinated debt (lower tier II). The guarantee will cover all existing aforementioned facilities with Irish institutions including Anglo Irish Bank Corporation plc and all related deposit taking subsidiaries (including Anglo Irish Bank International). The guarantee is for a two year period until 28th September 2010.

(from their IOM website)

"covered bonds" are special bonds having an underlying security of either public debt or mortgages on real estate (not highly depreciable assets such as machinery). is the bond yielding 7.20% a covered bond?

if yes then my qestion "U.K. government bonds, maturity 1 year yield presently 3.80%! how come "guaranteed" bonds of a debtor (which definitely does not have the rating of the United Kingdom's Treasury) can offer a 90% higher yield?" is still unanswered.

Apologies, almost missed this part - I don't think HM Treasury rates non UK banks do they?

[chiang mai]

Naam has again asked the question that's on my mind!

While another part of my mind says stuff it and go for the 7.2% interest

I think Sally that whilst Naam has a valid point here much of the argument is a red herring - a simple phone call will answer the question and provide peace of mind. The more important point however is the duration of the bond. I reckon the attraction of the Allied Irish scheme is that it is capable of being fixed for two years. It is not too difficult to find 6%+ currently but in one years time it will be impossible - me, I'm fixing for two years in the hope that helps offset some lean returns in year two.

[chiang mai]

I use Anglo Irish and believe me have been trying to get to the bottom of it.My Money is in the Isle of Man and is safe under the Irish Governments 2 year thing.Guess that means offshore.

EPG.

Never check these banks are fakes you will be crying soon.

They are all owned by New York Bankers

Was that your mate earlier on who reckons the Bank of England is owned by the banks also, a tad presumptuous to think America owns everything don't you think.

[Naam]

BTW, the 3.80% yield you quote on government bonds is an after tax figure I would guess.

easiest answers first. offshore investors like me who

quote SiamAmerican: "flaunder daily their wealth in an obscure way"

as well as Bloomie and all others do not quote such things like "after tax" because that would distort the picture as each individual tax burden is different. the only exception are U.S. income tax free municipality bonds were Bloomie quotes both yields in context with the relevant tax burden percentage. scroll down for "muni yields".

http://www.bloomberg.com/markets/rates/index.html

[Naam]

I think Sally that whilst Naam has a valid point here much of the argument is a red herring - a simple phone call will answer the question and provide peace of mind.

phone to WHOM? (translation for our american friends = "to who?")

[Naam]

Naam, if you look at the Sterling deposit rates offered by many UK lenders both on and offshore you will see that the trend has been in recent times to offer deposit rates that offer a premium to the customer - the rates on offer are often closer to Libor plus a premium in order to gain retail deposits. There's nothing really that shifty about the practice since what they are saying in essence is, it's cheaper for us to pay a premium on a retail deposit than to pay the extra to borrow money from other banks, if they can find it!

correct, no doubt about that. but are we talking about cash deposits or bonds? facts are:

-a debtor emmits a bond,

-prevailing market conditions, credit standing of debtor, interest of potential creditors and a dozen other factors will determine how much interest the debtor has to pay.

-the bond is emmitted at a certain price.

-no debtor or underwriter can offer this bond at a discount in order to provide a higher yield than the initial offer did. ONLY market conditions determine the price (up or down) and therefore the yield (up or down) of a bond.

[ThaiLife]

The UK government is talking of raising the protection limit ,of onshore accounts,up to 50,000 GBP.If they do ,will the IOM raise their protection limit too?

As far as I know the UK Government's FSCS compensation scheme ......

All UK deposits in bank or building society savings products are covered by the Financial Services Compensation Scheme (FSCS). This is an independent fund set up by UK financial bodies and regulated by the Financial Services Authority (FSA) which promises that, in the event of a bank collapsing, you'd get some of your money back. This applies to everyone, no matter their age, including children.

The first £35,000 you have saved per financial institution is protected.

Offshore Accounts are not covered by the UK FSCS compensation scheme

Below is some thing I posted on a money forum and received the reply that Offshore Accounts are not covered by the UK FSCS scheme .

I am a retired expat living in Asia, and I have all my savings in an Alliance & Leicester eSaver online account

( The Alliance & Leicester - Isle of Man ) like many people I am concerned at the current Banking situation. I have read about the FSCS

and the £35k protection rule , and especially the part about ........The limit's doubled in a joint account.

( Money saved in an account registered in Two names receives twice the protection; that's therefore the first £70,000.)

My first question is , If my Alliance & Leicester eSaver online account is in Two names ( myself and my wife )

but me being the first account holder's name , would the above apply (Two names receives twice the protection ) to my account ..IE

£ 35,000 protection for my self

£ 35,000 protection for my wife

Total £70,000 '' protected '' .... in my one account ... would this be correct ?

My second question is , as I have not been back to the UK for over 10 years now and considered a non UK resident for tax purposes would my non UK resident status make any differences to the FSCS ?

And my last and may be the most important question ..

As my Alliance & Leicester eSaver online account is with the A&L on the Isle of Man , would this off shore account be covered by

the £35k protection rule .?

Any comments on the above would be most welcome and appreciated

This is the answer I received back .....

The FSCS does not apply to offshore accounts, making your first two questions irrelevant.

The IOM has its own scheme, which has a maximum compensation limit of £15,000 per depositor and the product information for each of the A&L offshore eSaver accounts says "Protected by the Isle of Man Depositors' Compensation Scheme"

see here for details of the scheme ↴

http://www.gov.im/FSC/investor/dep_comp.xml

According to the underpinning legislation, Section 9.3(, "deposits in joint names shall be divided equally between the parties" - so jount account depositors would be compensated up to £15,000 each.

Links ....↴

http://www.moneysavingexpert.com/savings/safe-savings

What is the UK Government's FSCS compensation scheme ↴

http://www.fscs.org.uk/consumer/key_facts/

Prime Minister Gordon Brown has told the BBC that he will do "whatever it takes" to protect people's savings.↴

http://newsvote.bbc.co.uk/1/hi/uk_politics/7644818.stm

Gordon Brown has confirmed that the government plans to raise the guarantee for bank savings to £50,000 from £35,000 in a new banking law.↴

http://www.dailymail.co.uk/news/article-10...ay-turmoil.html

TL

[Zodiac]

It is clear to me that the Irish Government guarantee applies to the Anglo Irish Bank Isle of Man and the bank have confirmed that fact on their website namely and in other words that bond deposits are within the protection.

Lets' not allow some to try scare mongering and to suggest otherwise.

Edited October 1, 2008 by Zodiac

[Naam]

Apologies, almost missed this part - I don't think HM Treasury rates non UK banks do they?

whether H.M. Treasury rates a bond is irrelevant. by the way, H.M. Treasury does not rate any bonds and leaves that to the infamous triplets Poor Standards, Moody Blues and Bitch&Co what is relevant is my logical claim that no irish bank can have a higher rating than the bonds of H.M. Treasury. and here we go again: "why would a bond (guaranteed by the Country Ireland) pay a 90% higher yield than U.K. Treasuries?"

on a side note: Ireland has guaranteed (according to public sources) deposits to the tune (value) of 550 BILLION US-Dollars. this guarantee represents THREE TIMES the irish GDP (purchase power) and MORE THAN DOUBLE the irish GDP (at official exchange rate).

need i say more?

[lannarebirth]

It is clear to me that the Irish Government guarantee applies to the Anglo Irish Bank Isle of Man and the bank have comfirmed that fact on their website namely and in other words that bond deposits are within the protection.

Lets' not allow some to try scare mongering and to suggest otherwise.

Is this a state owned bank? If it is not a state owned bank, why would a government guarantee a bond it did not issue?

[Naam]

It is clear to me that the Irish Government guarantee applies to the Anglo Irish Bank Isle of Man and the bank have comfirmed that fact on their website namely and in other words that bond deposits are within the protection.

Lets' not allow some to try scare mongering and to suggest otherwise.

perhaps you should improve your knowledge of english to understand what the website says? no offence meant!

[chiang mai]

Apologies, almost missed this part - I don't think HM Treasury rates non UK banks do they?

whether H.M. Treasury rates a bond is irrelevant. by the way, H.M. Treasury does not rate any bonds and leaves that to the infamous triplets Poor Standards, Moody Blues and Bitch&Co what is relevant is my logical claim that no irish bank can have a higher rating than the bonds of H.M. Treasury. and here we go again: "why would a bond (guaranteed by the Country Ireland) pay a 90% higher yield than U.K. Treasuries?"

on a side note: Ireland has guaranteed (according to public sources) deposits to the tune (value) of 550 BILLION US-Dollars. this guarantee represents THREE TIMES the irish GDP (purchase power) and MORE THAN DOUBLE the irish GDP (at official exchange rate).

need i say more?

I do believe Mr Naam that you are actually winding us all up here and actually doing a fair job in the process. But you'll forgive me for not playing any more because I've got "stuff" to do.

[Naam]

It is clear to me that the Irish Government guarantee applies to the Anglo Irish Bank Isle of Man and the bank have comfirmed that fact on their website namely and in other words that bond deposits are within the protection.

Lets' not allow some to try scare mongering and to suggest otherwise.

Is this a state owned bank? If it is not a state owned bank, why would a government guarantee a bond it did not issue?

of course not. and nowhere is anything mentioned about "bond deposits". the simple reason is that "bond deposits" do not exist! there are bonds and there are deposits but no bond deposits. however it is correct that the Irish Government has announced it will guarantee deposits (i.e.CASH) kept with Irish Banks.

slowly but surely i am getting a bit bored explaining that "two plus two equals four", neither "3.99999999" nor "4.00000001"; especially as english is not my mother tongue and when i am tired -as i am now- i have problems to find the correct expressions

[Zodiac]

Mr Naam, what is your problem and OK I have changed my minor spelling error, happy now?

Maybe you do not like it that Anglo Irish is perhaps the best offshore bank in the world, offers high interest rates, and now depositors have the benefit of a Government guarantee as well.

Perhaps Mr. Naam you were with Lehmanns or some other lame duck?

Please do not give yourself another fit if I have made other spelling mistakes like an 'M' for an 'N'.

Poor dear.....

Have a nice day!

[Naam]

Apologies, almost missed this part - I don't think HM Treasury rates non UK banks do they?

whether H.M. Treasury rates a bond is irrelevant. by the way, H.M. Treasury does not rate any bonds and leaves that to the infamous triplets Poor Standards, Moody Blues and Bitch&Co what is relevant is my logical claim that no irish bank can have a higher rating than the bonds of H.M. Treasury. and here we go again: "why would a bond (guaranteed by the Country Ireland) pay a 90% higher yield than U.K. Treasuries?"

on a side note: Ireland has guaranteed (according to public sources) deposits to the tune (value) of 550 BILLION US-Dollars. this guarantee represents THREE TIMES the irish GDP (purchase power) and MORE THAN DOUBLE the irish GDP (at official exchange rate).

need i say more?

I do believe Mr Naam that you are actually winding us all up here and actually doing a fair job in the process. But you'll forgive me for not playing any more because I've got "stuff" to do.

you speak from my heart Honourable Sir. my Mrs, my dog and my pool are impatiently waiting for me. let's agree to disagree that 2+2=4 and look forward to a relaxing evening. cheers to high yields as well as to money for nothing and the chicks for free (copyright 1985 "Dire Straits").

[lannarebirth]

It is clear to me that the Irish Government guarantee applies to the Anglo Irish Bank Isle of Man and the bank have comfirmed that fact on their website namely and in other words that bond deposits are within the protection.

Lets' not allow some to try scare mongering and to suggest otherwise.

Is this a state owned bank? If it is not a state owned bank, why would a government guarantee a bond it did not issue?

of course not. and nowhere is anything mentioned about "bond deposits". the simple reason is that "bond deposits" do not exist! there are bonds and there are deposits but no bond deposits. however it is correct that the Irish Government has announced it will guarantee deposits (i.e.CASH) kept with Irish Banks.

slowly but surely i am getting a bit bored explaining that "two plus two equals four", neither "3.99999999" nor "4.00000001"; especially as english is not my mother tongue and when i am tired -as i am now- i have problems to find the correct expressions

I'm going to get the kids working on designing me a website. This sounds like a great opportunity. Who would have guessed there could be so many willing participants?

[Naam]

Mr Naam, what is your problem and OK I have changed my minor spelling error, happy now?

Maybe you do not like it that Anglo Irish is perhaps the best offshore bank in the world, offers high interest rates, and now depositors have the benefit of a Government guarantee as well.

Perhaps Mr. Naam you were with Lehmanns or some other lame duck?

Please do not give yourself another fit if I have made other spelling mistakes like an 'M' for an 'N'.

Poor dear.....

Have a nice day!

-i have no idea what you are talking about as i have not mentioned any spelling mistake but your misunderstanding and misquoting what the bank's website says.

-i don't care who or what you think what Anglo Irish is and the question whether i don't "like" the bank is silly and childish.

-i am neither a banker nor an economist but a (retired) nuclear physicist and mechanical engineer. that's the reason why i deal with facts and not fiction derived from wishful thinking.

-i only have fits when my dog vomits and i don't know the reason why.

-i freely admit that i am poor that's why i envy rich people like you banking with Anglo Irish.

[cmsally]

Thinking of that e-gold scam you often see reported on here, may I suggest the first name.

E-muck

[chiang mai]

Thinking of that e-gold scam you often see reported on here, may I suggest the first name.

E-muck

Or perhaps Eee By Gum, where there's muck there's money!

[beginner]

The Allied Irish Bank has a very chequered history.

Just have a look at Wikipedia.

Among their banking indiscretions are Overcharging customers in several ways including FX transactions.

quote "AIB announced on 27 September 2006 that the final outlay in respect of restitution and interest arising from overcharging amounted to €65 million and that this included a donation of €20.6 million on behalf of its customers to an unspecified charity that it was unable to identify. No employee or officer of the banks is to be disciplined ^[13]."

ALSO.

"Apart from FX, the Financial Regulator discovered, following an anonymous tip-off, that AIB overcharged customers €8.6 million^[14]. The account categories involved were:

• Surplus Builder, variable rate mortgage product with savings; 4,200 customers impacted; financial impact €3.6 million
  
• Student and Graduate facilities: 34,000 customers impacted; financial impact €1.4 million
  
• Overdraft limit amendments, fees incorrectly applies: 24,000 customers impacted; financial impact €600,000
  
• Financial & Leasing, early termination of consumer leases: 950 customers impacted; financial impact €230,000
  
• Personal Savings Plans Products, loan discounts: 2,436 customers impacted; financial impact €196,000
  
• Overdraft interest in Foreign Currency Hold Accounts, incorrect reference rate applied: 200 customers impacted
  
• Merchant Terminal Rental Charges: 155 customers impacted
  
• PPI Mortgage Top Ups: 573 customers impacted"
  

You may regard these as trivial and perhaps rather typical of the small scale, corrupt Irish Economy.

Perhaps more worrying.

Charles Haughey and the Moriarty Tribunal

In 2006, the Moriarty Tribunal published its report into the financial affairs of former Taoiseach Charles Haughey. Mr. Justice Moriarty found that AIB had settled a million-pound overdraft with Haughey on favourable terms for the politician shortly after he became Taoiseach in 1979; the tribunal found that the leniency shown by the bank in this case amounted to a benefit from the bank to Haughey. According to the report, the bank showed an extraordinary degree of deference to Mr. Haughey despite his financial excesses.^[16]

Personally I agree with Naam. If they are offering more than the going rate you have to ask...how and why.

Offshore HSBC pay lower rates. HSBC for me.

[Zodiac]

Get your facts right beginner:

The Allied Irish Bank to which you are referring is not the Anglo Irish Bank to which Naam and others including myself have raised an issue about.

Game, set, amd match!

[JimsKnight]

I use Anglo Irish and believe me have been trying to get to the bottom of it.My Money is in the Isle of Man and is safe under the Irish Governments 2 year thing.Guess that means offshore.

EPG.

Never check these banks are fakes you will be crying soon.

They are all owned by New York Bankers

Really? And which ones aren't then?

Let me us know with your answer...

I have an icelandic account.

Internet online and its pretty good

[HAPPYCHAPPIE]

Get your facts right beginner:

The Allied Irish Bank to which you are referring is not the Anglo Irish Bank to which Naam and others including myself have raised an issue about.

Game, set, amd match!

Thankyou Zodiac. You are correct. I have confused the two totally different banks. Its a good thing that I am not an investment adviser.

I really shouldn't post late at night when I am too tired to concentrate.

Can I use Richard Nixon's formula "All my previous statements regarding ANGLO IRISH BANK are inoperative".

Like Naam though, I am still wondering how they pay such a good rate.