Post Office Savings, Bank of Ireland & Compensation Schemes
With the ongoing debt saga in Ireland continuing to dominate the financial press, some savers with the Post Office are getting concerned about the security of their cash.
Savings accounts at the Post Office are provided by the Bank of Ireland, one of the ‘big four’ banks in Ireland, and focus of so much attention at the moment.
The Irish government holds a large stake in the Bank of Ireland.
With talk of an EU backed bail-out of the Irish economy, it is important to understand how savings in Irish banks are protected for UK savers.
On 1st November 2010, the Bank of Ireland created a new subsidiary – Bank of Ireland (UK) plc (Bank of Ireland UK) – and this is authorised and regulated by the Financial Services Authority (FSA).
As a result, customers with Post Office Savings accounts will be protected in accordance with the UK’s Financial Services Compensation Scheme (FSCS).
This gives Post Office savers with Bank of Ireland UK accounts protection up to a maximum limit of £50,000 per individual, should the bank be declared in default.
On 31st December 2010, the compensation limit will be increased from £50,000 to the Sterling equivalent of €100,000 per person per firm.
As the situation in Ireland continues to unfold, hopefully this will provide some reassurance to those savers with Post Office Bank of Ireland accounts.
Photo credit: Flickr.com Jim Linwood