Saturday 21 October 2017

How rural dwellers can keep their money safe - and beat local bank branch closures

As more cuts loom, many rural dwellers take risks by keeping cash at home, writes Louise McBride
Louise McBride

Louise McBride

Many rural dwellers are running out of places to manage their money safely - if they haven't done so already.

Hundreds of towns and villages across the country have already lost their local bank and post office over the last decade. There is also the threat of more than 200 post office closures and the news that 22 Ulster Bank branches are to shut, cutting more rural dwellers off from a banking service.

Without a nearby bank or post office, it could take a one- or two-hour return trip in a car to lodge a cheque or cash, to get a bank draft or postal order, or to do other simple day-to-day banking tasks. People often don't have the time for such trips and, furthermore, there are many elderly, immobile, and indeed young people who cannot drive.

"Any [further] post offices closures would have huge social implications for rural Ireland," said Martin Stapleton, farm business chairman with the Irish Farmers' Association. "Post offices offer various services which people would have to do without if their local post office is gone."

However, with the head of An Post, David McRedmond, recently stating that half of all of the post offices in the State are struggling to survive - and that the country has too many - the omens are not good.

So should you lose your local post office and bank, what options do you have left to manage your money?

Join your local credit union

You could be able to manage your money at your local credit union as well as you did at your local bank, particularly if you have a large and strong credit union nearby.

Most credit unions don't offer current accounts but you may still be able to get your salary paid into your credit union account as well as certain social welfare payments - as long as your local credit unions has signed up to an electronic fund transfer (EFT) service. You may also be able to set up direct debits with your credit union so you can pay bills. Over 100 credit unions allow you to have your salary paid into a credit union account and about 50 of these allow you to set up direct debits with them, according to the Irish League of Credit Unions (ILCU).

You could find it hard to get a current account, debit card or mortgage at your local credit union as not many credit unions offer these services - though this should improve in the coming years. Six credit unions recently got approval from the Central Bank to provide current accounts and debit cards. More credit unions are expected to apply for approval for these services in the future.

A small number of credit unions provide mortgages. St Raphael's Garda Credit Union, for example, provides home loans of up to €300,000 over 25 years. Although more credit unions are expected to roll out mortgages in the coming years, lending rules mean that many are not in a position to offer home loans. Credit unions are only allowed to loan out 10pc of their total loan book for terms that are longer than 10 years.

Last January, the Solution Centre - an innovation hub owned by credit unions - announced that it had paved the way for credit unions to enter the mortgage market by developing a mortgage framework to support those who wish to offer home loans. The Solution Centre is seeing "growing levels of interest" from credit unions which want to provide mortgages, according to Kevin Johnson, ceo of the Credit Union Development Association - which runs the Solution Centre.

The ILCU is also developing "a mortgage solution which would require no legislative change and which will provide credit unions with the structures and supports needed to enable them to offer mortgages directly to members," said a spokeswoman for the ILCU.

Credit unions also continue to offer their traditional savings accounts and small personal loans, although some credit unions are putting limits in place for the amount of new savings they will accept.

Be sure to check the track record and financial viability of your local credit union before joining it - financial irregularities and problems have been discovered at a number of credit unions in recent years.

Get a home safe

The spate of bank branch and post office closures has encouraged some rural dwellers to keep money at home - and more could be encouraged to do so if there are further culls.

"There are a lot of people taking a risk by leaving money in their home," said Seamus Boland, ceo of Irish Rural Link, which represents rural communities. "Irish Rural Link liaises with community alert and Neighbourhood Watch schemes. We are continually surprised at the number of people who still have cash in their home. Under no circumstances should you keep money at home. Get it into your credit union or bank. Criminals are more likely to use excess or extreme violence in burglaries today than they would have 10 or 15 years ago."

Although it is not advisable to keep money at home, consider getting a high-security home safe should you do so. Such safes can cost several thousand euro.

The cheaper home safes, which typically cost between €300 and €500, are usually easily broken into. No safe is unbreakable, however, and should you be the victim of an aggravated burglary, you could very easily be forced to open the safe yourself. Should you install a safe, get a good home alarm system too. You could pay around €500 to get a monitored intruder alarm installed - and you will also have to pay a monthly monitoring fee as well. For example, until the end of this month, Phonewatch offers a discounted rate of €499 (down from the usual price of €699) for the installation of its monitored alarm system. On top of this, Phonewatch charges a monthly fee of €38 for the monitoring and maintenance of the alarm.

A monitored CCTV system is an option for those living in an isolated rural area. The bill however could run into the thousands.

"A basic 4-camera CCTV system costs about €1,200 to be installed," said Aaron Mooney, commercial director with the Dublin-based security firm, Action 24. "It would then cost about €3 a day to get the system remotely monitored in our monitoring centre."

Put your money in a vault

The maliciousness of aggravated burglaries and the decision made by most banks to stop offering safety deposit boxes in recent years has encouraged more people to keep their money in secure vaults. However, as most of these vaults are located in Dublin, their location is unlikely to be convenient to rural dwellers.

It could cost anything from a few hundred to a few thousand euro to store money in a vault. For example, Dublin-based Merrion Vaults charges between €199 and €3,900 a year for a safe deposit box in its vault, depending on size.

Bank online

Even if your local bank branch closes, you can still manage your day-to-day finances with it if you can bank online. All of the Irish banks offer online banking and for many people, it is an easy and convenient way to manage money.

With online banking, you can usually check your account balances at any time, manage your direct debits and standing orders, transfer money between your own accounts, and pay money into other accounts - including international accounts. You may also be able to top up your mobile online and apply for travel insurance, home insurance and small loans. There are certain things which you can't do, such as lodging a cheque or cash, buying a bank draft, or getting a mortgage. Furthermore, those living in broadband black spots can't bank online as they don't have the internet.

There are many people, including some elderly individuals, who prefer face-to-face dealings with their bank to online banking. Sadly though, the days of face-to-face banking - as well as the days of the small village post office - could well be numbered.

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