The ĠEMMA team recommends that you should prioritise your spending during the COVID-19 period, and in doing so spend only on essentials. There is a good chance that you are cutting down on certain costs – for example, you should be saving on fuel costs as you are probably driving your car far less at the moment. The ĠEMMA team recommends that any savings that you can reasonably make you should use them to boost your Rainy Day Fund, or to start one if you do not have such a Fund.
The ĠEMMA team suggests that you should keep your savings at your bank. With everything going somewhat topsy-turvy as a result of COVID-19 you are not the only one who is probably questioning everything that we took for granted in the pre-COVID-19 world.
You may be asking yourself – is my money safe in the bank right now? Rather than placing my Rainy Day Fund savings in the bank should I actually withdraw my cask from my bank accounts?
The fact is, that your money at your bank is absolutely safe – probably in the safest place at the moment, even though interest rates are very much at the low end. And cash – deposited safely in a bank – is king right now.
Why are your savings bank deposits probably the safest place right now? Your savings are protected to a maximum of €100,000 by the Depositor Compensation Scheme. This is a scheme that covers all deposit accounts in the event that a bank fails – including savings, current, and fixed deposit accounts, as well as any account, which at the time of the bank’s failure, may be in credit (overdrafts for example).
The Depositor Compensation scheme works as follows:
- The limit of protection is €100,000 for a depositor per bank.
- All deposits with the bank are aggregated and the total is subject to the limit of €100,000. So if for example you bank with Bank XYZ and you have €20,000 in your current account; €50,000 in you saving account; and €50,000 in fixed term deposits, a total of €120,000 – the repayment will cover only €100,000.
- If you have a joint account with another person the limit of €100,000 applies to each depositor separately.
- In special circumstances, the scheme can provide protection of up to €500,000 – if, for example, your account held money for the purchase of a private residence, or held proceeds from the sale of a private residence.
Following the submission of a request for compensation deposits will be paid within 15 working days.