Government £35k bank guarantee

topgrape

Hi

Does anyone know if this is valid if your savings are with a foreign bank ? I have a lump sum with Kaupthing Edge (as recommended on this site).

Thanks

Dave_®f©

Kaupthing Edge is covered by the FSA for up to £35k......relax

Unless you have more than £35k in there....:eek:

topgrape

Please don't do that eek, because I have and it makes me nervous !! But I'm in the process of opening an account elsewhere as well so I can reduce my risk.

Thanks for your reply.

nick22_2

If you have two names on the account does this cover you up to 70k or is it still 35k.

dunstonh

The protection is not Government (as such) and its not FSA. It is the Financial Services Compensation Scheme (FSCS).

gogsboy

dunstonh wrote: »

The protection is not Government (as such) and its not FSA. It is the Financial Services Compensation Scheme (FSCS).

Whats the key differences, anything of concern?

I'm doing research for a friend who wants to put some money into savings and I use Icesave, so it's a toss up between them and ICICI but that cheque sending sounds like a deal killer and only heard of this Kaupthing Edge mob, would anyone advise them or avoid or steer in right direction

exel1966

topgrape wrote: »

Hi

Does anyone know if this is valid if your savings are with a foreign bank ? I have a lump sum with Kaupthing Edge (as recommended on this site).

Thanks

The KE as recommended here is a UK division, therefore fully protected by the FSCS up to £35K.

The only slight concern you could have with KE UK is that they can at any time novate this to KE Bank hf (Iceland) and therefore it would come under the juristriction of the Icelandic compensation scheme and the FSCS. You would still be covered up to £35K though in a more complicated manner meaning you would claim from two organisations. You have by opening the account already given consent to this happening at anytime if they so wish, providing you are notified.

Dave_®f©

topgrape wrote: »

Please don't do that eek, because I have and it makes me nervous !! But I'm in the process of opening an account elsewhere as well so I can reduce my risk.

Thanks for your reply.

Wise move to spread the risk and use another institution.

I have just under the limit with them....not wealthy enough to worry about that yet!

opinions4u

gogsboy wrote: »

Whats the key differences, anything of concern?

The FSCS has a funding issue.

It has a balance of around £4bn which is around 0.25% of personal savings in the UK and around 1.5% of HBOS savings balances (leave your HBOS money where it is btw).

The money ain't there to pay out if a big boy collapses. £35k limit, £50k limit or £10m limit is irrelevant. We talk so much about moving the excess over £35k from one place to another. While this does spread the risk, it also generates risk of being exposed to a new organisation that may be in more trouble than the one you just left.

Imposing a levy of 1% on all savings accounts would be unacceptable to consumers (we like our high rates) and would take 100 years to fund the FSCS fully anyway.

Should the worst happen, the fund would have to be topped up by other banks (who would be weakened at a time of stress on the system anyway) or the taxpayer.

To find, for example, £90bn, the taxpayer would have to pay double income tax for nearly three years. This would cripple the economy.

More likely the government would have to borrow long term and insist on the banks repaying this borrowing. (assuming the government could actually raise the funds for such a lame reason).

The outcome of this would be lower returns on savings accounts in future.

The knock on effect of low savings returns would be more people investing in stocks and shares or other "riskier" products.

The irony of this is that pushed to its full extent, a scheme meant to make savings appear more secure could eventually encourage savers to take risks with their money that are inappropriate.

ultra10

exel1966 wrote: »

The KE as recommended here is a UK division, therefore fully protected by the FSCS up to £35K.

The only slight concern you could have with KE UK is that they can at any time novate this to KE Bank hf (Iceland) and therefore it would come under the juristriction of the Icelandic compensation scheme and the FSCS. You would still be covered up to £35K though in a more complicated manner meaning you would claim from two organisations. You have by opening the account already given consent to this happening at anytime if they so wish, providing you are notified.

I have Just put 20k into KE for 6 months, & curious what they meant by the "Icelandic scheme" I have even emailed the FSCS to see there take on this today, I am a bit confused & just a tad concerned, Like every one I guess at the moment .. I wonder what would happen if KE really did go under, I am confident that they are fine ofcourse, just this little concern i have..

Aqu

nick22 wrote: »

If you have two names on the account does this cover you up to 70k or is it still 35k.

... therefore if two people held money in a joint savings account then each would have a potential claim for up to £35,000 i.e. £70,000 in total.

Just copied that out of a document we have in work