Time is running out for opening an SSIA

A rush of sales is expected as special savings incentive account offer closes, but first payments must be made before end April, writes Clare O'Dea.

The deadline for the Government special savings incentive scheme (SSIS) has become something of a moveable feast, as various financial institutions admit they will have difficulty processing last-minute direct debit transactions on time.

The normal rule is that a customer can complete a commencement declaration in one month and has until the end of the following month to make their first lodgment. Customers will not have the same lead time for commencement declarations completed in April, as the first lodgment must be made by the end of April.

But does this mean that waiting to open an account in April is leaving it too late? Well, it depends where you are taking your business. A rush of sales is expected in the last few weeks of the offer period and the need for a lodgment before the end of April will create additional demands on staff and systems.

To get around the direct debit problem, some institutions have said they will accept a cash lodgment for the first instalment of the savings plan and begin the direct debit a month later.

Ulster Bank will accept a cash lodgment for the first instalment up to April 30th for its variable-rate deposit account and fixed-rate account, as long as the customer has completed the application form, supplied the normal proof of their personal public service number, and address and identity information. Future standing order or direct-debit payments must be set up for not later than the 25th of the following 59 months.

The two largest banks, AIB and Bank of Ireland, are urging customers to open their accounts as soon as possible. AIB will not be accepting cash for the first payment because its systems have not been set up to accommodate that, a spokesman said.

"Assuming everything is in order, it takes about four working days to set up a direct debit and we at AIB can do that for you all the way up to April 22nd."

However the spokesman warned that there was no margin for error if the application was left too late.

"There is a percentage of errors in the documentation; somebody might put in a wrong detail or forget to sign it and, if anything had to be sent back, you could miss the deadline. If you want to be really sure, do it this month," he said.

Bank of Ireland is also worried that late applicants might miss out if there was a flaw in their documentation and the bank recommends that customers get their applications in by the first week in April. A company spokesman said the bank was looking at the option of accepting an initial cash or cheque lodgment so that it could facilitate people as long as possible.

"In all probability that is the route we will go down but we are sending out a strong message that customers should not leave this to the last minute."

The EBS is closing off its direct-debit applications on April 4th but will continue to accept cash or cheques for the first instalment of the scheme until the last day of the month.

Hibernian will set up direct debits for its customers until April 12th and will accept cash or cheques for the opening payment of the scheme until April 26th.

This €1-for-every-€4-saved scheme has been open to Irish residents for the past 10 months and is in the final phase for those interested in taking part. While people are entitled to take their time in assessing their options, it is probably not a good idea to make a long-term investment decision at the 11th hour.

There is potential for human error in any application, so it would be prudent to allow ample time for your account to be opened, with or without a hitch.