I am trying to argue with my bank manager at the moment for a better rate for my deposit…To strengthen my argument does anybody know what the Irish Banks are having to pay above base rate ie 4.25% plus libor of 70bps…as I feel this is the number I should be at least getting for my deposit
3 month Euribor is 4.97%
1 month Euribor is 4.48%
Overnight interbank is close to 4.25%
As for individual Irish banks, that’s anyone’s guess.
It isn’t that simple. They are not as interested at the moment in deposits as other lower tier forms of capital. Deposits are higher tier capital
Increasing deposits does not help them rebuild required capital ratios as they find themselves having to write down assets.
euribor is the average offered rate for interbank lending and is at around 4.4% one month, 4.95% 3 month. overnight it is probably 4.25%. i would think that the irish banks credit is still good and they can borrow at euribor. ie not like bradford and bingley in the uk where i am getting 6.5% on day to day savings where uk libor offered is 5.7%.
euribor doesn’t even come into it any more, its only a notional concept. Banks are buying in @ c. 6% lately, and if you want better % on deposit open a few where you get 7.5% up tto 1,000 per month, and just feed them, unless its a big lump sum in which case you should split it up anyways.
You should not be going near a high street Irish bank whilst the current crisis is in situ, lets just say there will be a lot more negativity to come from these institutions in the next 12 to 24 months, they are now very weak, and are keeping their loan exposures to themselves at present.
As for a suitable home for a medium sized deposit, my advice is to go foreign eg. Santander Group (owns Abbey) or Barclays (UK).
It was reported in the press that Irish banks were paying the biggest margin over Euribor in Europe. A figure of 0.4% was mentioned. The reported Euribor rate is only an average rate of deals reported by the banks. So AIB, BoI are paying circa 5.4% for 3 month money.
horses mouth before the rate hike 2 well known institutions were paying 6% don’t know about all of them but if its true for two then the others are not far off
Inquisitive idiot time…
Just wondering why the rates increase the longer the term as opposed to personal lending where the rates decrease the longer the term (eg credit card > personl loan > mortgage)?
The credit default swap spread provides a proxy to the spread over libor if the bank issued bonds. Rough guide to the interbank borrowing spread.
I don’t have access to these spreads. I think some people on the Pin do. If possible it would be great to have a sticky with daily or weekly updates on the spreads for Irish banks. Its what the financial markets think of the Irish banks debt positions and I feel it is much more informative than the share price
Credit card and personal loans are unsecured debt. The bank doen’t take the widescreen TV as collateral. Equally the bank doesn’t take a indepth stress tested view of your ability to repay before it issues you with a credit card or loan for a holiday. Hence the higher rate reflects the higher risk to the bank. I also think that because a credit card can carry a moving balance, the consumer isn’t really aware of what the interest rate is. The banks can use this to have higher rates.
I heard an ad on the radio this week for a BOI credit card at 9.5% interest. That’s not far off a personal loan rate at this stage.
Mortgages are secured on the property and are supposed to be lower risk and hence carry a lower rate.