Any Post Office term savings (Growth Bond, Loyalty Bond, Fixed Rate Cash ISA) taken out prior to 11th January 2010 with a term of up to 5yrs will not benefit from the 100,000 Euro Deposit Gaurantee Scheme once the Bank of Ireland transfers its UK operations into the Bank of Ireland (uk) plc in November 2010. In fact I have been informed by the Transfer Information Line that the 100,000 Euros safety net will be withdrawn on the 29th September 2010 (Tel. 0845 1461513).

I opened a 3yr Bond in March 2009 for my 80yr old mother relying upon the additional security provided by the 100,000 euros gaurantee (as compared to the UK £50,000 gaurantee) and the extra protection offered by the Irish Government top-up gaurantee (for amounts above 100,00 euros) to give her peace of mind. It now appears that the Bank of Ireland and their agents The Post Office are renaging upon those gaurantees and breaking the original contract.

The excuse being given is that EU regulation will mean all EC countries will provide gaurantees of 100,000 euros as from the 01st January 2011 (yet this is by no means certain). In the meantime i.e. from 29th Sept 2010 to 01st Jan 2011 savers have to carry the risk for any amounts over £50,000 held on deposit with the Post Office in fixed term accounts opened before 11th Jan 2010.
The alternatives offered are to close the accounts free of charge or top slice the fixed term account(s) to reduce the balance to a figure below £50,000. I cannot believe that they can legally change the terms and conditions of such fixed term accounts in such an arrogant and arbitrary way.

Perversly, account balances over £50,000 held in an 'on demand' e.g. instant access savings account will continue to be protected by the Irish Government Scheme until 31st Dec 2010.

The notice of these changes does invite anyone who objects do so at the COURT Hearing, Royal Courts of Justice, The Strand on the 21st October 2010.