POST OFFICE 7.05% whats the risk?

sombrero

Have £300k to invest for one year. Do not need to touch the cash for one year and I want a one year bond. Most of the decent rates for one year bonds have gone now but the Post Office rate holds.

I was thinking of placing the entire amount with Post Office.

Any thoughts on risk factor?

dunstonh

its a fixed term deposit, not an investment.

The only risk is that the standard FSCS savings limit applies.

sombrero

understand its a one year fixed term bond but my point is on the risk factor. I would have thought that the Post Office have to be reasonably safe even in todays financial climate.

cheerfulcat

It's not issued by the Post Office; the " bond " is a savings product from the Bank of Ireland.

Milarky

cheerfulcat wrote: »

It's not issued by the Post Office; the " bond " is a savings product from the Bank of Ireland.

Good point; the PO is simply a channel/partner for financial products - that's the reason they presumeably need the cash. Sorry for my hazy thinking but you always associate the PO with the state [deep pockets] don't you? - even though PO counters has been in the 'private sector' for some time now....

(Oh! It's a good job you don't have go and queue to apply for this isn't it?)

sabretoothtigger

ns&i is the government bonds, etc I think nsandi.com

7% does sound good, is the bank of ireland covered by a depositors guarantee

majorzott

Well I made some enquiries into the 'Bank of Ireland', I went onto the FSA website to look up if they are authorised, (http://www.fsa.gov.uk/register/firmSearchForm.do), when you search for 'Bank of Ireland', there are several Bank of Ireland subsideries, so it's confusing to know which one applies, as some are authorised, some are EEA autorised and some are registered. So I got onto the 'Bank of Ireland' via telephone and asked them directly, which FSA registration number applies; they gave me: 206097, which when you look it up on FSA = 'Anglo Irish Bank Corporation', which is EEA Authorised, so you are covered, but you would need to claim the first £14000 (I think), from the Irish Gov. (I decided to invest with them, but they are slow to respond, 15 working days to set up your account). Please post if you discover any more info.
Regards

jack_spratt_2

From the application form for the growth bond

Financial Services Compensation scheme

Bank of Ireland is a member of the financial services compensation scheme established under the financial services and markets act 2000.
in respect of deposits with a UK office payments under the scheme are limited to 100% of the first 35,000 of the deposits with the bank.
Most depositors including individuals and small firms are covered .The scheme covers deposits made with offices of the bank within the European Economic Area and deposits denominated in all currencies are treated a like.

From the statement my guess is that it is covered as any UK bank would be

DRS1

This offer closes tomorrow in case anyone is interested - you would have to go to the post office to get it though; the internet option is closed already.

Richard_Webster

Post Office is not organised to deal with this kind of investment - in our case papers have been lost by them in the post and so they say they can't open the account even though they have had the money for 6 weeks. After that inefficiency we wouldn't want them to open an account - but we are still waiting for the money back AND we will ask for the interest we have lost through their inefficiency.

The investment may be fine from protection point of view but all the stress it has caused my wife as attorney for her very old father in looking after his money means that we will go somewhere more reliable even though it may go over the £35K limit.

Apologies for signature - I normally post on the House Buying/Selling Board!

DRS1

Richard - has the cheque cleared? If so surely they have already set up the account and all that has been lost is the certificate showing the investment? So surely you can say to them that they need to issue a replacement certificate.

If not then presumably they have the lost the cheque along with your FIL's application and the money will still be in your FIL's account earning whatever interest that pays? You may want to stop the cheque if it has not been presented yet.