Are fixed rate bonds protected under £35K rule?

Savannah02K

OK, I know this is going to sound a very simple minded question to some of you but please bear with me. Friend was talking last night about her £20K (an inheritance) that she invested in a fixed rate one year bond with Halifax. Someone has now told her that the £35K protection rule only applies to ordinary savings and not fixed rate or any other kind of bonds. I told her I thought that was garbage but would check with you guys as you're the smart ones on things like this. Am I right and it is garbage? Thanks.

YorkshireBoy

The documentation she received when she opened the bond will detail the protection she enjoys.

But, in general, 'savings bonds' fall into the £35K deposit protection scheme.

derrick

Yes it is applied to FR savings bonds, these are "ordinary" savings, just usually locked in for a certain time, in this case one year.

dunstonh

You would think that "bond" means it is an investment not a deposit. However, that is misnaming by your provider. The product you have is a fixed term deposit and therefore comes under the deposit protection sceheme rules not the investment scheme rules (where real bonds come under).

The use of the term "bond" is wrong most of the times nowadays and has just turned into a marketing gimmick as bond is a popular term.

(note when I say you, I mean your friend)

Savannah02K

Thanks so much for the replies folks, that makes me, and subsequently friend, feel lot safer. Now just have to worry about my own ISA savings in the Brad and Bing - at the moment feel I don't want to join the panic rush that seems to be gripping parts of the nation!