Malta Depositor Compensation Scheme??

ar_2015

Hi,

I am interested in investing a sum of money into Agri Bank. For a 3 year fixed rate bond the interest rate (gross: 2.7%) looks relatively good compared to other products available on the market. However, the money is secured under the Malta Depositor Compensation Scheme as opposed to the FSCS. Can the Malta Depositor Compensation Scheme be trusted??

Thanks in advance.

EdGasket

See this article and avoid:

http://www.theguardian.com/money/blog/2013/apr/06/banking-loophole-malta

Archi_Bald

Agri Bank wouldn't be the first company in very recent history that sets up under a maltese licence, takes huge deposits, and then vanishes from the face of the earth.

Several bookmakers ran that trick over the last 5 or so years, and have left punters out of pocket to the tune of several hundred thousand pounds. The maltese Finance Ministry, responsible for these licences, shamefully washed their hands of any responsibility, and does not appear to have done anything to fix the legal loopholes that enabled those scams.

I would never do any business with any company licensed in Malta.

Aside from that, why bother with a questionable fixed term 2.7% when you can get fully FSCS protected 3%, 4% and 5% instant access accounts? If it's got to be a 3-year fixed account, you can still get 2.5% with full FSCS protection (Harrods Bank).

jimjames

Archi_Bald wrote: »

Aside from that, why bother with a questionable fixed term 2.7% when you can get fully FSCS protected 3%, 4% and 5% instant access accounts? If it's got to be a 3-year fixed account, you can still get 2.5% with full FSCS protection (Harrods Bank).

That's what puzzles me.

So many people seem to want to jump hoops and find these obscure banks or companies offering dubious returns but can't be bothered with the effort of running some current accounts.

Far less hassle to manage those than trying to get your money back from something that has collapsed.

C_Mababejive

Have you ever been to Malta? I woiuldnt trust 'em.

qbs

"when you can get fully FSCS protected 3%, 4% and 5% instant access accounts?" Where?

colsten

qbs wrote: »

"when you can get fully FSCS protected 3%, 4% and 5% instant access accounts?" Where?

Nationwide, TSB, Lloyds, BOS, Tesco, Santander.

6% at HSBC, M&S and FD.

Some people even claim you can get 7% for one year at Clydesdale / Yorkshire though this does stretch the imagination a little. Others claim that you can get an infinite AER %age with Halifax Reward accounts. To some extent, yes, it is absolutely possible. You just have to do a little research.

qbs

Regular savings accounts aren't instant access. Of the banks listed I can only see Nationwide (3% on £2500), TSB/Lloyds (5% on £2000), BOS (5% on £5000), Tesco (3% on £3000) and Santander (3% on £20000) current accounts come close to the claim, so not really possible, without a hell of a lot of transfers to multiple current accounts, to get the returns mentioned on anything other than relatively small amounts of cash.

colsten

qbs wrote: »

Regular savings accounts aren't instant access. Of the banks listed I can only see Nationwide (3% on £2500), TSB/Lloyds (5% on £2000), BOS (5% on £5000), Tesco (3% on £3000) and Santander (3% on £20000) current accounts come close to the claim, so not really possible, without a hell of a lot of transfers to multiple current accounts, to get the returns mentioned on anything other than relatively small amounts of cash.

Granted, the regular savings account are not instant access - but any half serious saver would be able to hang on to their cash for 12 months. Even the Christmas savers do.......

What are your definitions of "a hell of a lot of transfers" and "relatively small amounts of cash ? Just a few SOs and DDs will allow you to get between 3 and 5% AER on up to £50,000 in sole accounts.

NB.Slight corrections to the accounts/rates/max balances you have listed. Nationwide is 5% AER on up to £2,500; BOS is 3 x £5,000, Lloyds do not have a 5% account, Tesco is 2 x £3,000. Just for sole accounts - lots more potential for joint accounts.

qbs

Even allowing for the differences in accounts, it's still a heck of a lot of work for the return. And given my past experience of some of the banks listed, I'd spend more time monitoring transactions than enjoying the rewards.
It's easy to see how tempting Agri Bank can become, but I don't think I'll bother.

colsten

qbs wrote: »

Even allowing for the differences in accounts, it's still a heck of a lot of work for the return. And given my past experience of some of the banks listed, I'd spend more time monitoring transactions than enjoying the rewards.
It's easy to see how tempting Agri Bank can become, but I don't think I'll bother.

Again, I am not sure of your definition of "a heck of a lot". It might not be your kettle of fish but lots and lots of people on here have multiple accounts, purely for the interest, and nobody is groaning about the "work" involved.

It is of course less effort to deposit all your money at one single bank but I would put it to you, for the reasons people mentioned before, that it would be sheer madness to use a bank that doesn't offer the FSCS guarantee. Nobody stands in your way, though, go ahead if it's the right choice for yourself at this stage.