When Rose Mary McDonagh’s local bank closed temporarily for three months during the first Covid-19 lockdown, she faced a 40km – or around 45-minute – round trip to her next nearest branch anytime she needed to lodge a cheque.
cDonagh, who is chair of the Irish Farmers’ Association’s farm business committee, lives near Headford in Galway. The Bank of Ireland (BoI) Headford branch – which offers advice and self-service banking – was one of a number of BoI branches which closed temporarily between late March and late June 2020 as a result of the Covid crisis.
Although it’s not possible to lodge cash or cheques to your account over-the-counter in the Headford branch, customers can use the branch’s ATM to do this. When the Headford branch was closed temporarily during the first lockdown however, customers could no longer use the branch’s ATM to lodge cash or cheques to their accounts. This was also the case at the other BoI branches that were temporarily closed during the first lockdown.
‘If a farmer sells a cow or sheep at a mart, they often get a cheque in the post’
“You could go to the ATM [in Headford] and take out money but the bank took away the lodgement facility,” said McDonagh. “So to do any lodgements [of cheques or cash], you had to go to the BoI branch in Tuam, Galway City or Claremorris.”
Tuam, the nearest of these three branches, is about a 20km drive from Headford. “If a farmer sells a cow or sheep at a mart, they often get a cheque in the post – and they’ll go to their bank to lodge the cheque to their account,” said McDonagh. “When a local branch is gone, having to go to the next town to lodge a cheque takes a lot of time out of your day.”
When the Headford branch reopened in late June 2020, the lodgement facility was returned. However, the temporary closure of this branch – and the temporary withdrawal of its ATM’s cheque lodgement facility – showed how the loss of even one banking service can impact a local community.
Many Irish banks temporarily closed – or restricted the services available in certain – branches over the first lockdown in response to the challenges posed by the pandemic. While this inconvenience was temporary, with a spate of permanent bank branch closures now in the pipeline, more people will have to travel a distance to get to their nearest bank – and for the long haul too.
‘In some cases, there could be 20km or 30km or more between towns’
In early October, BoI will close 88 branches in the Republic of Ireland. AIB is set to close 15 of its branches by the end of the year. The upcoming withdrawal of Ulster Bank from Ireland means that its branches are likely to start closing next year – though the bank has said that it does not anticipate closing any branches over the next ten months. KBC Bank announced last April that it is looking to exit the Irish banking market.
The closure of a local bank means that some people could have to drive as much as 50km to get to the next branch, according to Séamus Boland, CEO of Irish Rural Link, which represents rural communities. Those living in the west, south-west and north-west are amongst the worst hit by bank branch closures because of the scattered populations and long distance between towns, explained Boland.
“In some cases, there could be 20km or 30km or more between towns,” said Boland. “The worst I’ve heard is 50km. This means that many people are having to travel further for essential banking.”
Furthermore, people could be cut off from their bank entirely if they cannot drive and if online banking is a struggle for them.
“There are some people who can’t travel for health reasons – because as people get older, there are various reasons they may not be able to drive,” said Boland. “Or you might have people on low incomes who don’t have a car or who only have one car for the family [used by someone else during the day].”
So if the closure of your local bank branch means you simply cannot get to your bank now – or you have to go out of your way to do so, how could you manage your banking elsewhere?
1. Check out your credit union
As well as the savings and loans which credit unions have traditionally offered, many now offer current accounts, debit cards and online banking. As long as your credit union provides a current account, you should be able to get an overdraft. Even where a credit union doesn’t offer a full current account, you may be able to get your salary paid into your credit union account and to set up a direct debit to pay bills. Some of the larger credit unions – such as St Raphael’s Garda Credit Union – offer mortgages.
The bigger the credit union, the more likely you are to be able to open a current account there – and to access the main products and services you can get at a bank.
Core Credit Union for example is a group of credit unions in south Dublin. “There’s very little we are not providing which you can get at the bank,” said Michael Byrne, its chief executive.
The main products which the larger credit unions don’t yet provide are credit cards and investment products, according to Byrne.
As well as offering current accounts, Core Credit Union offers home insurance and life insurance. “In a few months time, we will be launching car insurance and cancer care cover,” said Byrne. “We offer niche mortgages – that is, mortgages where there may be complications which the bank doesn’t want to get into – such as where a family inheritance might be involved.”
It should be relatively straightforward to switch a current account you hold with a bank to your credit union – if the credit union offers current accounts. “You can switch your current account and direct debits to us in exactly the same way as you would if switching your current account from one bank to another,” said Byrne.
Many credit unions have recently launched apps which allow you to access your credit union account and apply for loans online.
Be aware that the charges on a credit union current account could be higher than on a bank’s. The credit union current accounts offered through currentaccount.ie for example cost €48 a year in maintenance fees. With these accounts, you’re not charged for using your debit card or for electronic payments into and out of your account. However, you can only make five free ATM withdrawals a month – and once you go over that limit, you’re charged 50c per withdrawal.
Some credit unions are offering current accounts and debit cards under the MYCU brand (mycu.ie).
Another advantage of credit unions is that you may be able to get much cheaper personal loans there than at your bank. Core Credit Union for example charges interest of 4.9pc, 5.96pc or 7.98pc on its greener home loans – which are offered to those improving the energy efficiency of their homes. St Raphael’s Garda Credit Union charge 5.06pc interest on its car loans.
As is the case in the banks, the return on credit union savings is typically very low, if any return is earned at all. Furthermore, many credit unions have savings caps which limit the amount of money you can save with them. As these savings limits could be as low as €15,000 or €20,000, you could have to save your money elsewhere if you have a large lump sum to deposit. Central Bank rules on capital requirements (the amount of capital the Central Bank requires a financial institution to have) are one of the main reasons these savings caps were introduced, according to credit unions.
2. Bank at the Post Office
As An Post offers current accounts, debit cards, credit cards, loans and a range of bill-paying services, it too could prove to be a good alternative to your bank – particularly if you don’t have a credit union nearby. The services available at your Post Office will be more limited than those you can typically get at the banks or larger credit unions though. An Post does not yet offer mortgages – though it is expected to do so next year. An Post recently launched its An Post Money app and a current account aimed at seven to 15-year-olds.
With an annual maintenance fee of €60, the An Post Money current account (its current account for adults) is on the pricey side.
3. Check out the digital banks
Digital banks such as Revolut and N26 offer current accounts with no maintenance fees. Both banks also offer debit cards. A big draw of these accounts is the ability to send money to local bank accounts – and other holders of Revolut and N26 accounts – for free.
“Revolut and N26 are a viable alternative to [traditional] current accounts – they’re good for day-to-day banking and cheap for foreign exchange,” said Daragh Cassidy, spokesman for the price comparison website Bonkers.ie.
Your ability to avoid day-to-day banking charges with the digital banks will depend on how you use the accounts –be particularly careful here if withdrawing cash.
You can’t get everything that the traditional banks offer at Revolut and N26. As the digital banks have no physical branches in Ireland, they are unlikely to suit you if you want to be able to walk into a branch to do your banking either. Of course, if you’re happy enough to bank online, you may not have to move from your existing bank at all if your local branch has closed – as all of the Irish banks offer online banking. As always, think before you jump.