The Post Office and Bank of Ireland in talks over new deposit account

The Post Office is in talks with the Bank of Ireland to offer a current account that would give customers an unlimited guarantee on deposits

The Post Office has announced that it has begun talks with the Bank of Ireland to offer a current account that would give customers an unlimited guarantee on deposits.

Ministers are under pressure to use the Post Office to create a public sector “people’s bank” that will provide basic financial services to those who most need them.

Royal Mail, which runs the Post Office, is understood to be in discussions with the Bank of Ireland, which already runs a number of its existing financial services.

The accounts look set to have an unlimited guarantee because the Irish Government has offered to underwrite all deposits in Irish banks.

Sources suggested that had the partnership been with a British bank, it would have been subject to the existing GBP 50,000 guarantee.

The terms of the account, and whether it would offer more favourable terms than high street competitors, are yet to be decided.

The Post Office already has 1.8 million customers who use its financial services, including savings accounts, foreign currency and credit cards. Ministers are desperate to increase the use of Post Offices to prevent them from closing, particularly during the down-turn.