Northern Rock - Can Investors Help ?

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liffy99_2
liffy99_2 Posts: 19 Forumite
in Savings & investments
OK, NR are borrowing huge sums from the Government as the financial markets are uneasy about lending money to mortgage institutions.
Given that NR deposits are now 100% guaranteed for savers (a better deal than with ANY other bank) isn't the best place for savers to place their money WITH NR ?
A significant influx of deposits might help to alleviate the pressure on NR's repayment schedule, reduce borrowing from the BoE, increase share value and start to restore confidence.

I've put my money where my mouth is.

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  • Dithering_Dad
    Dithering_Dad Posts: 4,554 Forumite
    Mortgage-free Glee!
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    NR deposits are only 100% guaranteed for those savers who had their money in the account prior to the run on the bank. Any new savers are not covered.

    Given your low post count, I am a little suspicious as to your motives. I don't think the good people of MSE should risk their savings just to prop up the shareprice of a bank that still looks as though it may be broken up.

    Sorry if my suspicions are unfounded.
    Mortgage Free in 3 Years (Apr 2007 / Currently / Δ Difference)
    [strike]● Interest Only Pt: £36,924.12 / £ - - - - 1.00 / Δ £36,923.12[/strike] - Paid off! Yay!! :)
    ● Home Extension: £48,468.07 / £44,435.42 / Δ £4032.65
    ● Repayment Part: £64,331.11 / £59,877.15 / Δ £4453.96
    Total Mortgage Debt: £149,723.30 / £104,313.57 / Δ £45,409.73
  • gt94sss2
    gt94sss2 Posts: 5,631 Forumite
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    Dithering_Dad wrote: »
    NR deposits are only 100% guaranteed for those savers who had their money in the account prior to the run on the bank. Any new savers are not covered.

    The government extended the guarantee on the 9 October to cover new savers as well.

    Regards
    Sunil
  • Slim
    Slim Posts: 77 Forumite
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    Northern Rock have always had a cavalier attitude toward depositors. With this and the extra risk (what if NR is taken over what happens to the guarantee - nobody knows) NR must pay interest rates above those obtainable elsewhere.
    The maximum return for shareholders will be obtained if NR continues as an independent company. It needs to show that its reputation is not completely destroyed by starting to attract savers deposits by paying premium rates.
  • purch
    purch Posts: 9,865 Forumite
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    NR is still rated P-1 for short term deposits in the latest Moody rankings

    Long Term Debt still Aaa3 and A1

    Financial strength only a C though
    'In nature, there are neither rewards nor punishments - there are Consequences.'
  • Aegis
    Aegis Posts: 5,688 Forumite
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    liffy99 wrote: »
    OK, NR are borrowing huge sums from the Government as the financial markets are uneasy about lending money to mortgage institutions.
    Given that NR deposits are now 100% guaranteed for savers (a better deal than with ANY other bank) isn't the best place for savers to place their money WITH NR ?
    A significant influx of deposits might help to alleviate the pressure on NR's repayment schedule, reduce borrowing from the BoE, increase share value and start to restore confidence.

    I've put my money where my mouth is.
    Do they have rates worth depositing for?

    If not, they're not going to attract people that easily. I for one will not be going to them unless they can top the current market leader in either current or saving accounts, and I must say that I doubt they can beat either!
    I am a Chartered Financial Planner
    Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
  • chazza
    chazza Posts: 42 Forumite
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    liffy99 wrote: »
    OK, NR are borrowing huge sums from the Government as the financial markets are uneasy about lending money to mortgage institutions.
    Given that NR deposits are now 100% guaranteed for savers (a better deal than with ANY other bank) isn't the best place for savers to place their money WITH NR ?
    A significant influx of deposits might help to alleviate the pressure on NR's repayment schedule, reduce borrowing from the BoE, increase share value and start to restore confidence.

    I've put my money where my mouth is.

    lol sounds like your a shareholder.
  • barak
    barak Posts: 1,258 Forumite
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    liffy99 wrote: »
    ,,,,,A significant influx of deposits might help to alleviate the pressure on NR's repayment schedule, reduce borrowing from the BoE, increase share value and start to restore confidence.

    I've put my money where my mouth is.
    Hopefully - at least £25 billion :)
    I may be wrong, but my understanding is that even if NR got back all the retail deposits withdrawn, they would still require assistance from the BofE owing to their commercial business.
    ".....where it is corrupt, purge it....."
  • Mikeyorks
    Mikeyorks Posts: 10,369 Forumite
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    liffy99 wrote: »
    I've put my money where my mouth is.


    You haven't said what rate your mouth got:rolleyes: ...... or how much you put in it;)
    If you want to test the depth of the water .........don't use both feet !
  • melbury
    melbury Posts: 13,251 Forumite
    Name Dropper First Anniversary First Post I've been Money Tipped!
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    My family's life savings have been with Northern Rock for quite a number of years and I have never doubted their integrity.

    However, we have decided not to reinvest maturing bonds with them as their future seems so up in the air. I know they have that wonderful guarantee in place now, but nobody knows what will happen when they eventually get taken over - whoever does take them over.

    So we have been the proverbial rats leaving the sinking ship!
    Stopped smoking 27/12/2007, but could start again at any time :eek:

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