By Richard Evans
Last Updated: 4:22PM BST 30 Sep 200
Several Post Office savings accounts are run by Bank of Ireland, which is one of six banks to benefit from the Irish government's move earlier today.
Until last week, Post Office customers enjoyed the same protection as other British savers - they would get back the first £35,000 of their deposits if the bank went bust. At that time the limit under Ireland's deposit protection scheme was 20,000 euros (about £16,000). But Ireland then raised its maximum payout to 100,000 euros and then today made the guarantee unlimited. The change comes into effect immediately and will last for two years.
"I can confirm that all Post Office savings held with Bank of Ireland are covered by the Irish government's new arrangement announced this morning," said Hayley Fowell of the Post Office. "This covers our Instant Saver account, Growth Bonds, Five Year Saver and Cash Isa." The heavily advertised Instant Saver currently pays interest of 5.75 per cent.
Dan Loughrey, a spokesman for Bank of Ireland, said: "Post Office deposits are on the balance sheet of the governor and company of the Bank of Ireland and are therefore covered under this scheme." He said about 1.5m customers of Bank of Ireland who saved via the Post Office would benefit from the enhanced protection arrangements. Although all its British customers were currently Post Office customers, he added, the bank planned to offer an online savings account to British savers soon.
It is also understood that British savers at Anglo Irish Bank will also benefit from the unlimited guarantee. Anglo Irish offers two best-buy savings accounts, according to Michelle Slade of Moneyfacts, the data provider.
"Its Seven-Day Notice account issue 2 pays 6.55 per cent interest, while the Easy Access deposit issue 2 pays 6.4 per cent. These accounts, which have a maximum balance of £2m and are operated by phone and post, were already best buys, so I wouldn't be surprised if they saw an influx of customers."
Other options for customers who want 100 per cent protection for their savings include Northern Rock, which is currently owned by the British Government, and National Savings & Investments, another state body.
The Irish government said in a statement: "This very important initiative is designed to safeguard the Irish financial system and to remedy a serious disturbance in the economy caused by the recent turmoil in the international financial markets."
The only other institutions to offer a 100 per cent savings guarantee in the UK include the nationalised Northern Rock and National Savings & Investments. Bradford & Bingley savers - now with Abbey - will fall under the Financial Services Compensation Scheme which guarantees up to £35,000.
as they think "If you can't get this right, it doesn't bode well for my money" etc etc.