Would it be bonkers to put money away in the Bank of Ireland?

[smileitssunny]

I have a small sum of money my parents gave me, for my DS. It is meant to go into long term savings. I have seen a good deal (4.5% for 5 years) but it's with the Bank of Ireland.
Now while I'm on maternity leave I do live in a bubble, but surely Ireland's economy is dire... would the money be safe, do you think?

Check the small print. UK bank customers are covered by the FSA Compensation scheme for deposits up to £80,000. If Bank of Ireland customers have similar protection you could deposit with more confidence. If not, then avoid. Alternatively, have a look at tax-free options for children via UK organisations. Junior ISAs have just come out for children born before 2002 or after 2010, for example, and some banks/building societies are offering reasonable rates for 3 and 5 year bonds.

Check details here
www.moneysavingexpert.com/savings/safe-savings
It gives details of what protection is offered in different circumstances, in particular whether foreign banks are registered for UK levels of protection.

Bank of Ireland accounts in sterling now have the same guarantees as any other uk bank. It wasn't always the case but changed about a year or so ago as far as I can remember

Thanks all
Sorry to post and run... RL got in the way.
I found a higher rate with Yorkshire bs in. the end.

There is usually an inverse relationship between the rate for deposits and the credit rating of the bank. In other words dodgier banks pay more to attract funds they find hard to raise elsewhere.

That being said if it's a UK deposit (check it's not IOM, Channel Islands, Dublin, Luxembourg etc) you will be covered by the FSCS, but you don't want to be in the position of finding out. The investors in Icesave had to wait months/years for refunds and many of them thought it was safe.

We have seen people being over 7.5% on sterling presently, but with a ropey bank, so won't touch it!

No easy answers I'm afraid. Get the better rate and accept the risk, or go elsewhere. How about splitting it up a bit to spread the risk?

Thanks Honestly, it's not enough to consider splitting.