Q&A

Dominic Coyle answers some of your questions.

ACCOUNT SWITCHING

I rang my bank the other day because I wanted to change the feeder account for my SSIA (i.e. to have the direct debit taken from a TSB joint account instead of my AIB current account).

The woman said this was not possible under new bank rules because they use a "sweeper" system for SSIAs instead of direct debits, and it was not permitted to take the SSIA from a non-AIB account. It struck me that:

a) this is a load of rubbish, as I know people who feed their SSIAs from other banks;

b) this rule would make it impossible for me to switch my current account to another bank without voiding my SSIA, which is hardly in the spirit of the new switching legislation.

Mr C.G., Dublin

It sounds like your bank has told you a tall story. To be fair, confusion over how Special Savings Incentive Accounts (SSIAs) work and how account holders can make changes - such as altering the amount put in from month to month or, as in your case, changing the feeder account - is not unique to AIB. I have come across a similar lack of accurate information from many of the other SSIA providers.

At the time the accounts were being set up, people were consistently being given incorrect information and, at that time, I called in this column for greater attention from the account providers to training for staff on the rules governing SSIAs.

I have checked with AIB and it confirms that there is nothing to stop you switching your feeder account to TSB as long as you continue to fulfil the eligibility requirements for an SSIA.

This is likely to become a more prominent issue as the new rules facilitating the switching of current accounts between institutions trigger the growth of such moves.

However, ensure the new direct debit is up and running before you cancel the existing one. It is better to have an overlap that can later be credited back to your account than to miss a payment, which could lead to your account being frozen or, worse, closed.

To be fair to AIB and the individual with whom you were dealing, the bank does operate a sweeper system but it is designed to help rather than hinder the customer.

Basically, AIB set up a sweeper to take the money from individual AIB accounts - in line with direct debit mandates - and feed it into the SSIAs. If a customer did not have funds to cover their monthly payment on the due day, the sweeper account would defer any action and return a day or two later to again seek the funds. If, at that stage, there was still not enough funds to meet the full regular contribution, the sweeper would withdraw the minimum payment under the SSIA rules in order to keep that SSIA account active.

It sounds like a worthy customer-centred initiative but it operates behind rather than instead of direct debits. Feel free to move your feeder account.

IRISH NATIONWIDE

You are probably fed up with questions on Irish Nationwide but I thought that I would qualify for a windfall payment in any eventual demutualisation until I read your answer to a query in Q&A on January 28th regarding the relevant list of thresholds.

My wife and I lived in the UK for 41 years before retiring back home in 1997. We opened a share account with Irish Nationwide in February 1995 with a cheque for £100 sterling. This came to £97.33 Irish money as they made a reduction for changeover etc. The pound and the punt were about the same at that time.

Up to June 1997 this amount only increased to £98.19 punt. I increased this account to £2,254.38 in December 1997.

The question is: £97.75 (including interest) in December 1995 would be just short of the £100 required per your list of thresholds which increased to £1,000 punt in January 1996. I would be £2.25 short in December 1995. Do you think that they might pay something if demutualisation takes place?

Nationwide do send me notice of a.g.m.s so my account is definitely a share account.

Mr J.O'R., Wexford

It sounds like you might just fall outside the threshold for eligibility for any windfall. However, you say that you receive notice of annual general meetings, which would indicate that you are seen as a member and therefore likely to be eligible for any windfall that may arrive.

Your initial £100 sterling deposit came to just £97.33 after foreign exchange charges - below the £100 punt limit then in place.

Up to December 1997 the account trundled along at this level (just below the £100 limit). That month you boosted the balance to £2,254.38 (€2,863) but the threshold had, by then, risen to €3,000. That threshold had been in operation since May 6th, 1997.

On that evidence, you fall outside the terms for any windfall. While that would be hard luck for the sake of less than £3, the nature of windfalls is that there has to be some line in place and Irish Nationwide has been clear about the thresholds.

Still, the fact that you receive information about a.g.m.s would lead one to believe that you are seen as a member and would therefore qualify. I suggest you contact the society directly by email at the secretary@inbs.ie or by post to: The Secretary, Irish Nationwide Building Society, Nationwide House, Grand Parade, Dublin 6, to determine whether you qualify or not.

My mother has held an Irish Nationwide account since 1992. The account is eligible for membership but the amount she holds in it currently stands at around €20. That is below the limits you mentioned in last week's column and I wonder whether she will now be precluded from benefiting from any move to sell Irish Nationwide.

Mr G.C., Cork

The answer is probably no, although she will certainly be precluded from attending or voting at this year's annual general meeting - the society's rules allow attendance only by members with €125 or more in their accounts for six months prior to the end of the financial year and who maintain that minimum balance until the date of the a.g.m.

The society does say on its website that people falling below the minimum threshold on their accounts may have those accounts closed. However, it does not state that such accounts will automatically be closed and it appears as though your mother's account remains open. But I would suggest you raise the account balance above the €125 level as soon as possible and keep it above that level.

In the meantime, the society tells me that it cannot precisely determine the appropriate threshold for your mother in 1992 because there were a few accounts that required a higher minimum balance even back then. It is almost certain that it would have been £100 (€127) but the society suggests you contact it directly at the address in the query above.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, D'Olier Street, Dublin 2 or e-mail to dcoyle@irish-times.ie. This column is a reader service and is not intended to replace professional advice. Due to the volume of mail, there may be a delay in answering queries. All suitable queries will be answered through the columns of the newspaper. No personal correspondence will be entered into.