Ulster Bank has announced a phased withdrawal of all its banking activity and financial services within the Republic of Ireland.
The upcoming departure of Ulster Bank has left almost one million customers searching in order to switch their bank accounts to another institution. If you are one of these customers, you may be confused about when to switch, what the process entails and how long it will take.
MLMG Financial is here to help you by setting out the process and providing you with the information you need to know.
Key Dates And Time Periods
When is Ulster Bank leaving Ireland?
Ulster Bank is giving its customers up to six months’ notice to close their accounts before it pulls out of the Irish market. The financial institution began sending formal letters of notice of six months to customers towards the end of the first quarter of 2022. The letters instruct customers to choose a new bank, move to that bank, and close their Ulster Bank accounts.
This applies to both personal and business customers. Customers don’t need to take action until you receive your letter. However, with so many customers looking to switch their accounts, our advice is to prepare to open a new account now so that if there are any delays, you have plenty of time.
Are You Likely To Incur Additional Costs?
Ulster Bank’s exit will drive an upward pressure on interest rates and banking fees in the short to medium term. This will hit the SME loans sector the hardest. However, mortgage holders and personal current account and loan customers will also be impacted.
This, combined with high inflation (7% in April 2022 – reaching a 37-year high) means your savings with Banks and Credit Unions will fall in value in real terms.
What You Need To Know – Savings & Deposits
Savings and deposit accounts will also be closed so customers need to find a new home for these monies. Banks and Credit Unions offer little to no interest, This combined with high inflation means that your savings with Banks and Credit Unions will fall in value in real terms.
To compound matters, larger deposits are in danger of incurring negative interest rate charges. This is already the case for pension funds and larger corporate deposits with some of the banks. There were rumours that negative rates could also be imposed on larger personal deposits, although talk of a likely European Central Bank (ECB) rate increase recently may ease these concerns.
Investment funds and savings plans offer real alternatives to bank deposits and savings accounts, particularly over the longer term. Over the past number of years returns from investment in equities, bonds and the like have far outstripped that of cash. That is why more investors are and should be looking at alternatives to holding cash on deposit. —
We at MLMG can explain the different products that are available and their suitability for you.
What You Need To Know – Mortgages, Loans, Overdrafts & Credit Cards
Different processes apply to the different products. We have outlined each of them below.
Mortgages And Loans
Ulster Bank will transfer mortgages and you will retain existing terms and conditions. If you are currently on a fixed-rate contract, the rate will be honoured until the end of the fixed period.
If you are on a tracker interest rate, this will be transferred to your new mortgage provider. If you are currently on a variable rate or are out of a fixed period and not on a tracker, switching your mortgage might be a good opportunity to get a better interest rate to save money.
Loans will transfer to your new provider with the current terms and conditions.
If you have a credit card with Ulster Bank, there is potential for your credit card to be sold to a new provider but nothing has been agreed upon as of yet. Alternatively, the debt could be paid off to reduce your current cost of credit.
You will be required to pay off your overdraft before your current account closes. If you need an ongoing overdraft facility you will need to ensure that your new provider is happy to provide you with that facility. We know some people may have difficulty paying off an overdraft before switching. If you think you will have difficulty, contact the bank as soon as possible and explain your situation.
What Actions Should You Take Now?
Ulster Bank will communicate with customers in due course. However, current account and savings customers will need to find a new home for their finances sooner rather than later.
MLMG Financial will consult with you to provide a bespoke financial plan to ensure you find the best solution. Contact our team of experts today to ensure you make the best financial decisions for your future.