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Monday 19 February 2018

Keeping your cash safe...

Having lost faith in Irish banks, savers are increasingly storing their money and their valuables at home, as John Cradden reports

IT is nearly a year since the EU/IMF bank bailout, but many consumers still have little confidence in the banks. From July last year to July this year, Irish households alone withdrew over €5.4bn from all banks located in Ireland, a drop of well over 5pc.

The latest Central Bank figures suggest that the amount of cash leaving Irish banks each month is beginning to fall at last, but the overall trend in deposit outflows is continuing.

This is despite some very attractive interest rates on savings accounts being offered by the Irish banks.

According to price comparison site, banks are offering the highest interest rates on one-year fixed-term accounts, with the highest rate coming from Permanent TSB and the EBS at over 4pc.

So where is all this cash going? Some of it may be going into overseas banks, while others may be investing in gold or other physical commodities.

Gold, which is considered to be a safe haven in uncertain economic times, is still proving hugely popular among worried Irish investors.

But it's also safe to say that some of this cash is being kept at home, as sales of safes have surged over the past couple of years.

Stephen Garvey, director of Co Meath-based safe supplier, says: "We have noticed a continuing increase in the sale of safes, specifically safes for home use. "Over the past 24 months, we have seen sales in the home safes sector increase by over 100pc."

He reckons that many people are still putting their confidence in physical commodities like gold and silver.

"Many people are now buying safes because they need one to protect these valuables," he said.

Mr Garvey adds that the country's burglary rate is also another contributing factor to this huge increase.

According to Eircom PhoneWatch's 2009 Burglary Report, around €72m worth of goods were stolen from Irish households in the period July 2008 to June 2009, with thefts of jewellery accounting for over 33pc of the total value stolen.

This actually represents a fall of over 12pc on the same period the previous year, but that period had seen a huge 32pc rise in residential burglaries.

CSO figures showed a sharp rise in burglaries from 2007 before reaching a peak in 2009 and falling slightly last year.

You can spend as little or as much as you want on a home safe, it seems -- anything from €40 to as much as €20,000.

Spending only a few hundred on a safe may well be a false economy, depending on who you talk to.

"A good starting point is approximately €700 to €750 for something decent," says Paul Cunneen, of Cunneen Lock and Safe in Cork. He says it doesn't make sense to spend €1,000 on a large plasma TV to watch the football on, but only €100 or less on a safe.

"Why not the other way round? You will get what you pay for," he says. Mr Garvey says that all safes have a 'cash rating', which is a security rating given to safes by independent testing houses such as the ECBS. The higher the cash rating, the better the safe, he says.

"I would always recommend a domestic safe with a certified cash rating of €5,000 or more, as they offer good protection at a low cost." Such safes can be bought for €180.

In Europe, the euro grade certification is used by insurers, says Mr Garvey.

"The safe is given a euro grade rating of between 0 and 6, based on the lock type, boltwork and materials used to build the safe." But how much can you reasonably keep in the cheapest or smallest safes?

Mr Cunneen says the question really should be: "What are you allowed to store?" This is because home insurance firms will only cover a limited amount of cash in the home under the contents section of your policy.

If the amount of cash or jewellery is above a certain limit, say €10,000, then the insurer will insist on you keeping it in a safe.

Any safe that meets the European EN1143 standard is generally accepted, but how much the insurer will be willing to cover depends on the independent certification of the safe -- the cash rating.

It's also worth noting that jewellery or 'valuables' usually have only one-10th of the cash value allowed in a safe, says Mr Cunneen. "For example, a safe with €5,000 cash rating would allow you to store, say, €2,500 in cash and up to €25,000 worth of jewellery."

Free-standing cash safes are the most popular type of safe, but Mr Cunneen recommends one weighing at least 60kg so that they are heavy enough to deter casual thieves.

"Generally, a good guide is, if you can carry it, it's not an insurance-rated safe, and any loss or theft would be covered by the owner. Aim for a level 2 grade, which is allows you to store approximately €6,000 in cash."

However, Mr Garvey says high security safes can be manufactured more cheaply and are lighter than 10 years ago thanks to production techniques and improvements in materials used to construct the safe.

"Under-floor safes are also very popular because, as well as providing security, they allow the safe to remain hidden from intruders."

Irish Independent Supplement

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