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I have all my money in Ulster Bank and I heard last week that they are closing. I receive my salary in my Ulster Bank account and used to work there so I did not pay any fees with them.
I was wondering if I should drop them now and put my money in a different bank or bank accounts, or should I wait?
If I must change, how do I do it? I don’t earn enough to get free commissions at some banks. I have more than € 90,000 in my bank account, so I’m not sure what to do?
Mrs CB, email
There is talk of Ulster Bank’s parent company, NatWest (known until recently as Royal Bank of Scotland), disconnecting the Irish operation. Given the small number of banks in Ireland, it would be an unpleasant move, but Ulster has been in the mischievous pace for a long time.
It required a significant rescue from NatWest / RBS after the financial crisis and has since been found to have serious problems on the technology front. All along it has struggled to deliver results that warrant continued UK support.
We are told that we will know the outcome of the deliberations of NatWest’s senior executives at the end of October, so there are no immediate concerns.
More importantly, if the decision is made to close the bank, it will not happen in a rush. This is not a bank on the brink of collapse, but one that is simply facing some tough business decisions. As such, if the bank is to close, it will have to close its operations for several months or, more likely, years.
The bottom line from their perspective is that there is no urgency for you to act and there is no danger that your salary will be paid into a black hole.
We had this situation before, with the National Irish Bank owned by Danske Bank. If Ulster decides to close, they will have to notify all customers and arrange for them to transfer their accounts to another bank. The Central Bank will require them to establish a structure to do this and to advise clients in a very clear and direct way on how it works.
Aside from choosing your new bank and branch and keeping an eye on the process, you as a customer should have nothing to do. Most importantly, the actual process of transferring your account must be done at no cost to you, the customer.
Regular payments
In addition to setting up the new account and organizing debit cards etc., the switch process should also ensure the smooth transfer of regular payment instructions, such as standing orders and direct debits, without you having to control the process.
Since I am not a person to trust, I would keep a list of such regular payments (mortgage, home and car insurance, utilities, property taxes, etc.) and would make sure after the change that a) they are all in place in the new bank and b) that payments continue to be made on the days of the month that are most convenient for you. For some people, this is right after payday, others prefer to spread those payments throughout the month.
You may need to provide such a list to the bank for the transfer process; we’ll have to wait and see, assuming the shutdown goes ahead.
You will also need to find out if you need to inform someone who receives money from your bank through such direct exchange debits, although again, from memory, this was managed by the banks in the Danske / National Irish Bank case.
Most importantly, there is no rush to hassle your employer’s pay department. Nothing has happened yet: it may not happen at all. If the bank decides to withdraw from Ireland, or simply the Republic, any employer will not need more than a month’s notice to divert your salary to a new account.
You have a lot of time for that. Meanwhile, from your point of view, you are not paying any fees on your current banking arrangements. And, as you say, any change to another bank will see you paying fees / charges. Everyone is retiring from free banking with the exception of the clients of the golden years, and you are nowhere near that.
So my advice would be to stay with Ulster until they force you to move. That saves you money, not a lot, but something.
The only thing I would advise you is not to let your savings in Ulster Bank, or in any other institution, exceed € 100,000. Up to that level they are covered by a state guarantee if something goes wrong. But if you have more than € 100,000 with a bank for whatever reason, some of that money could be at risk in the event of a collapse.
Therefore, above that guarantee threshold, you will need to divide your savings between two banks, not two accounts at the same bank.
Please send your inquiries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2, or email [email protected]. This column is a reading service and is not intended to replace professional advice. Personal correspondence will not be accepted.
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