So they can't get cash,but can they still make purchases with their cards? It'd be a good time to go around to all the local pm dealers.
Many of them (e.g. teachers) haven't been getting paid by the government and are many months behind in pay. They keep working because they have been promised that they will eventually get paid and there isn't exactly a lot of jobs they can switch to. Quite a few are moving out of Athens and back to the villages to stay with relatives, you will find quite a few families living together as an extended family and all surviving on the wages of one family member's job or pension, when that goes or gets cut there will be more hardship. Wait staff have been getting a couple of euro a night in wages and expected to make the rest in tips. It has been pretty bad over there for the past couple of years, steadily getting worse. Maybe there are still cuts that can be made but why should the people who are already suffering have to make sacrifices because their own government couldn't run a budget?
Yes, offset accounts are the ducks guts. You are indeed getting tax-free home loan interest rates on your cash. Only a fool has substantial cash in a savings account and a big mortgage. Perhaps even safer than a regular bank savings account from a bail-in? because it's not a personal savings account.
I would imagine the bank would bail-in the money in the offset account and still expect the loan to be paid off. lose-lose Well what is it then ? If it's money the bank owes you it's a deposit.
That's what I'm thinking. Savings forfeited in an offset account may be written off against any outstanding debt, whereas savings forfeted in a regular savings account may just be written off without any related debt reduction for an individual. Does any one know if the savings that were forfeited in Cyprus have been or are intending to be paid back?
Money in an offset account can be instantly transferred onto the mortgage, hereby paying it off: so if you have $100k in an offset account and things are starting to smell like shit, you could instantly transfer say $90K into the mortgage, hereby paying $90K off the mortgage and reducing your loan balance by $90K. That portion of your saving is safe since it has been used to pay the mortgage and reduce your balance owning. Then you go to a few ATMs over a few days and withdraw your $10K in cash, leaving minimal savings in your bank account. Of course that works only if you have a mortgage. But it's a measure very quickly implemented, could have been done by Greeks last week easy.
The history of financial turmoil would indicate otherwise. It's ALWAYS the accounts in credit that are taken. Why would an offset account be any different? Of course, it's not.
I disagree, it is vastly different. Your mortgage account is not in credit, it is a debt, even if there are extra funds there you have paid in advance. Your savings may stand a better chance of being put to a useful purpose as opposed to being confiscated.
The offset account is still considered a separate account from your mortgage account. It's not like they're the same account. The question is, do you think, in the event of a bail-in, that bankers will favor one savings account over another?
That's not how offset accounts work. Any money in your offset account automatically reduces your loan balance and hence interest owing. There is no need to "transfer" anything. You can off course transfer money out of your offset account any time you like, and buy booze, hookers, a Ferrari etc. It's silly to actually pay off your house early and close your loan out. As any money you've built up in your offset account is money you can have "on tap" at your home loan interest rate. Your home loan is the cheapest credit you'll ever get.
That is true. :/ I've no idea, I'm trying to explore the safest means by which someone could hold a deposit in the bank, and in the event of a bail-in, would still get some benefit rather than seeing the lot evaporate. Really, if a government makes its mind up, nothing is safe from being confiscated.
I know exactly how an offset account works. All I am saying is that if one is worried monies held in offset might be seized under a Greece scenario - which is what we are discussing here - it is simple enough to transfer the balance of the offset onto the mortgage and reduce the balance owning. This is a sure way to ensure your monies held in offset cannot be confiscated.
Technically it depends on how the "offset account" is actually implemented. With the Commonwealth Bank for example my loan had an "offset" like facility that wasn't a separate account, it was part of the loan account. When I payed extra in on top of the repayments then I would build up "credit" in the loan that I could withdraw as cash at any time (or simply stop repaying the loan and the money would come out of that built up credit). Then you have offset transaction accounts that are designed for your everyday transactions, and the loan balance is reduced by the balance in that account. So it's the former type I was talking about. The later transaction type is most likely (legally) considered just a normal cash savings account.
There's no guarantee with your proposed method. What if they 1. block those transfers, or 2. treat 'available credit' against mortgages as if it were a deposit. You're playing their game and they make the rules.
Totally. If I had credit built up in my loan account and saw this crisis coming I would have withdrawn all of it as cash and kept it safe. Although, come to think of it, if you have paid (extra) money into a loan, they can't take that balance away from you. But I guess they could nullify any available credit built up if they wanted to.
The Greek government has confirmed that banks will be closed all week, after a decision by the European Central Bank not to extend emergency funding. In a decree, it cited the "extremely urgent" need to protect the financial system due to the lack of liquidity. Cash withdrawals will be limited to 60 (42; $66) a day for this period, the decree say
That is not an offset account. That is you making extra repayments that the bank allows you to redraw in the future. That's the scenario I'd recommend instead of an offset account. No they can't nullify payments you've made to reduce the loan balance. The balance of your loan today is what you owe the bank.
1. As long as the banks are open, these transfers are not blocked! Now that the banks are closed, yes, you might be screwed. But one would have to be very disconnected and careless to wait until now despite all the warning signs. 2. Perhaps more so that point 1. However IMO more likely to be safe than having it in a savings account, but agree you have no control over this. This is all last minute fixes though. The Greek drama has been going on for years! I would think anyone with enough wealth to be worried about bailouts, could have taken counter measures long ago. Things like opening a foreign account, placing funds under management in another country, purchasing assets outside of Greece, even purchasing bullion held overseas such as through the Perth Mint program or the countless Swiss dealers.
