Your Money: How to Manage Your Finances When a Local Bank Closes
When Rose Mary McDonagh’s local bank closed temporarily for three months during the first Covid-19 lockdown, she had to make a 40 km round trip – or about 45 minutes – to her next nearest branch each time she needed to deposit a check.
cDonagh, who is chairman of the Irish Farmers’ Association farming business committee, lives near Headford in Galway. The Headford branch of the Bank of Ireland (BoI) – which offers advice and self-service banking services – was one of several BoI branches that temporarily closed between late March and late June 2020 due to the Covid crisis.
While it is not possible to deposit cash or checks to your account at the Headford branch counter, customers can use the branch ATM to do so. However, when the Headford branch was temporarily closed during the first lockdown, customers could no longer use the branch’s ATM to deposit cash or checks into their accounts. This was also the case in the other BoI agencies which were temporarily closed during the first containment.
“If a farmer sells a cow or a sheep in a market, he often receives a check in the mail”
“You can go to the ATM [in Headford] and withdraw the money, but the bank took the housing away, ”McDonagh said. “So to make housing [of cheques or cash], you had to go to the BoI agency in Tuam, Galway City or Claremorris.
Tuam, the closest of these three branches, is about 12 miles from Headford. “If a farmer sells a cow or a sheep in a market, he often receives a check in the mail – and he goes to his bank to deposit the check into his account,” McDonagh said. “When a local branch is gone, having to travel to the next town to deposit a check takes a long time in your day. ”
When the Headford branch reopened at the end of June 2020, the housing center was returned. However, the temporary closure of that branch – and the temporary removal of its ATM’s check deposit facility – has shown how the loss of a single banking service can impact a local community.
Many Irish banks temporarily closed – or restricted the services available at some – branches during the first lockdown in response to challenges posed by the pandemic. While this inconvenience has been temporary, with a wave of permanent bank branch closures underway, more people will have to travel a distance to get to their nearest bank – and in the long term, too.
“In some cases there might be 20 km or 30 km or more between cities”
At the beginning of October, BoI will close 88 branches in the Republic of Ireland. AIB is expected to close 15 of its branches by the end of the year. Ulster Bank’s upcoming withdrawal from Ireland means its branches are expected to start closing next year – although the bank has said it does not plan to close any branches in the next ten months. KBC Bank announced last April its intention to withdraw from the Irish banking market.
Closing a local bank means some people could have to travel up to 50 km to get to the next branch, according to Séamus Boland, CEO of Irish Rural Link, which represents rural communities. Those living in the west, southwest and northwest are among the most affected by bank branch closures due to dispersed populations and the long distance between cities, Boland said.
“In some cases there could be 20 km or 30 km or more between cities,” Boland said. “The worst I have heard is 50 km. This means that many people have to travel further afield for essential banking operations. “
Additionally, people could be cut off from their bank altogether if they can’t drive and online banking is a struggle for them.
“Some people cannot travel for health reasons – because as people get older there are various reasons why they may not be able to drive,” Boland said. “Or you could have low-income people who don’t have a car or only have one car for the family.” [used by someone else during the day]. “
So if closing your local bank branch means you just can’t get to your bank now – or you have to do everything you can to do so, how could you handle your banking elsewhere?
1. Check your checkout
In addition to the savings and loans that credit unions traditionally offered, many now offer checking accounts, debit cards, and online banking. As long as your credit union provides a checking account, you should be able to get overdraft. Even when a credit union doesn’t offer a full checking account, you may be able to have your paycheck paid into your credit union account and set up a direct debit to pay your bills. Some of the larger credit unions, such as St Raphael’s Garda Credit Union, offer mortgages.
The larger the credit union, the more likely you are to be able to open a checking account there – and access the main products and services you can get at a bank.
Core Credit Union, for example, is a group of credit unions in South Dublin. “We don’t provide much that you can get in the bank,” said Michael Byrne, its managing director.
The main products that the largest credit unions do not yet provide are credit cards and investment products, according to Byrne.
In addition to offering checking accounts, Core Credit Union offers home and life insurance. “In a few months, we’ll be launching auto insurance and cancer coverage,” Byrne said. “We offer niche mortgages, that is, mortgages in which there may be complications that the bank does not want to enter into, for example where a family inheritance may be involved.
It should be relatively straightforward to transfer a checking account you have with a bank to your credit union – if the credit union offers checking accounts. “You can transfer your checking account and direct debits with us in exactly the same way you would if you were moving your checking account from one bank to another,” Byrne said.
Many credit unions have recently launched apps that allow you to access your credit union account and apply for loans online.
Be aware that the charges on the checking account of a credit union can be higher than those of a bank. Credit union current accounts offered via currentaccount.ie, for example, cost € 48 per year in account maintenance fees. With these accounts, you are not charged for the use of your debit card or for electronic payments entering and leaving your account. However, you can only make five free ATM withdrawals per month – and once you go over that limit you are charged 50c per withdrawal.
Some credit unions offer checking accounts and debit cards under the MYCU brand (mycu.ie).
Another advantage of credit unions is that you can get personal loans much cheaper there than at your bank. Core Credit Union, for example, charges 4.9pc, 5.96pc, or 7.98pc interest on its greener home loans – which are offered to those who improve the energy efficiency of their homes. St Raphael’s Garda Credit Union charges interest of 5.06 pc on its car loans.
As is the case with banks, the return on savings of credit unions is usually very low, if not zero. Additionally, many credit unions have savings limits that limit the amount of money you can save with them. Since these savings limits can be as low as $ 15,000 or $ 20,000, you may have to save your money elsewhere if you have a large lump sum to deposit. The Central Bank’s rules on capital requirements (the amount of capital that the Central Bank requires from a financial institution) is one of the main reasons these savings caps were introduced, according to credit unions. .
2. Bank at the post office
As An Post offers checking accounts, debit cards, credit cards, loans, and a range of bill payment services, it could also prove to be a good alternative to your bank, especially if you don’t. have no credit union nearby. The services available at your post office, however, will be more limited than what you can usually get from banks or large credit unions. An Post does not offer mortgages yet, although it is expected to do so next year. An Post recently launched its An Post Money app and checking account for young people aged 7 to 15.
With an annual account maintenance fee of € 60, the An Post Money checking account (his checking account for adults) is quite expensive.
3. Discover digital banks
Digital banks such as Revolut and N26 offer current accounts with no maintenance fees. Both banks also offer debit cards. A big appeal of these accounts is the ability to send money to local bank accounts – and other Revolut and N26 account holders – for free.
“Revolut and N26 are a viable alternative to [traditional] checking accounts – they’re good for day-to-day banking and cheap for foreign currency, ”said Daragh Cassidy, spokesperson for price comparison site Bonkers.ie.
Your ability to avoid daily bank charges with digital banks will depend on how you use the accounts – be especially careful here if you are withdrawing money.
You can’t get everything traditional banks offer at Revolut and N26. As digital banks do not have physical branches in Ireland, they are unlikely to be suitable for you if you also want to be able to walk into a branch to do your banking. Of course, if you are happy enough to bank online, you may not need to leave your existing bank at all if your local branch has closed, as all Irish banks offer online banking. line. As always, think before you jump.