Ulster Bank are one of Ireland’s biggest banks and have been operating here for over 160 years but they have struggled to remain profitable. The banks parent company, NatWest, made the announcement that Ulster Bank will be closing down its business in the Republic of Ireland, leaving all 1.1million Irish customers confused. Although changes aren’t expected to happen for another year or so, with any changes expected to be brought in gradually, it would be wise if you are a customer with Ulster Bank to start preparing for a move now. In this post we will be covering what is actually happening, when it could be happening and what you should do if you are currently with Ulster Bank.
Ulster Bank are a big player in the savings market. For the current circumstances with banks and interest rates on savings they still offer the best of a bad bunch compared to competitors AIB & Bank of Ireland who offer a zero return on investment. Whenever competitors leave the market it is always going to be bad for business. With a major player like Ulster Bank out of the equation, AIB & Bank of Ireland could impose the negative rates that seem to be destined to come at a quicker rate at lower levels instead of the wealthiest accounts only.
If you have a current account with Ulster Bank there is no need to worry about your money. You are in a completely safe position and the switch from Ulster Bank to one of your choice will be simple whilst your funds will be safe until you decide to switch. You will be given 2 months notice when the bank does eventually close and even at that point the money would be sent in a cheque if the bank closes and you have not switched, so there’s no need to panic.
There are more options now than ever for current accounts. There are still the giants of the market such as AIB & BOI for people to choose from. There is 9 overall current account providers in Ireland. Interestingly, N26 & Revolut along with KBC offer a completely different alternative by where you can do it all from the comfort of your home on a mobile app, allowing you plenty of options to fit your needs.
Mortgage holders with Ulster Bank are protected. The current terms will stay the same. Ulster Banks loan books will be purchased by another group with AIB rumoured to be in discussions for the purchase. However, any mortgage holders without a tracker rate with the bank should seek expert advice from a broker.
There is no need to worry, but you will have to make your own choice on what to do with the savings. If you sit back and let the time ride out, Ulster Banks deposit book could be signed off to another bank, leaving your savings in there hands. With the current situation, it may be best to look at putting your savings into An Post and their state savings product offerings. You can earn almost 1% a year on its 10 year term. These rates are quite good in current circumstances and you have the option of withdrawing your money at any time.
There is no need to panic, all of your funds and services will be safe and any changes will be gradually brought in over years. You have plenty of time to consider all your options.
Financial Planning Standards Board
Certified Financial Planner