Q&A:Personal finance - your queries answered

Q: What happens if someone buys one of these National Solidarity Bonds but dies before the 10 years pass? Do they lose out?

Ms FP, e-mail

A:First off, you don't lose out, although that is a moot point for someone who has already passed away.

Where a person holding a National Solidarity Bond in their own name dies, the bond forms part of their estate. According to the National Treasury Management Agency, which will manage the bond, it will continue to be invested pending the instructions of the executors or personal representatives of the individual’s estate. Interest and any bonuses due will be applied.

If the bond is held in the name of two or more people, it will pass to the remaining investors named on the initial application.

A serious concern about bank guarantees

Q: Recent comment about bank guarantees leaves out the vital bit. The ELG scheme only covers deposits that have been put in place after January 1st, 2010. Most of the larger deposits are probably pre-January 1st 2010 and should be re-deposited or taken out of the bank. When people with large deposits realise this the results could be interesting.

PH Dublin

A:You are quite correct. The Eligible Liabilities Guarantee was brought in this year to succeed the two-year emergency bank guarantee which was put in place after the collapse of Lehmans amid a crisis of confidence in Irish banks.

It will provide protection for deposits in excess of €100,000, but only if those deposits have been made after the bank or building society signed up to the Eligible Liabilities Guarantee and before the original emergency guarantee expires on September 29th 2010.

This is especially important for people who may have money in fixed-term deposits, although few people have been prepared to sign up to fixed terms beyond the expiry of the original guarantee.

The extended guarantee – which will cover sums until September 2015 – came into force in December 2009.

However, it is only valid once the bank or building society signs up for it. Irish Life Permanent was the first to do so on January 4th, 2010. Bank of Ireland, ICS Building Society, AIB and Anglo Irish Bank all joined in January, with EBS and Irish Nationwide Building Society signing up by February 3rd.

It is important to remember that anyone holding less than €100,000 in any given institution need not panic. Apart from the special bank guarantees, savings up to €100,000 are protected by an underlying deposit protection scheme.

The threshold relates to all sums in any one bank, building society or credit union – for instance if you have two or more accounts in one institution and the total exceeds €100,000, not everything will be covered.

The threshold applies to the individual, so if the account(s) are held in joint names, the threshold of what is protected doubles to €200,000.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street, Dublin 2. E-mail: dcoyle@ irishtimes.com

This column is a reader service and is not intended to replace professional advice. No personal correspondence will be entered into