Mum only just heard about Kaupthing Edge, what shall she do?

louloulouisa

Hi

I'm writing on behalf of my Mum, who has only just heard about Kaupthing Edge, She is really worried, she has about £3,300 in the account. She is worried she will lose her savings, What shall she do? What bank should she transfer it to?

Thanks in advance

Lou

Count_Dante

Your mums savings are fine. The UK savings were taken over by ING. The website is here:

http://www.kaupthingedge.co.uk/

ray123

There should not be a problem with the bank.
What I would advise is that she transfers it into an ISA - nationwide have a one year fixed rate for 6.15%. KE pays 6.5%, but if your mum is a tax payer, that is 5.2% NET.

louloulouisa

Thanks for your reply, so is ING 100% safe? I read this;

"This means in the event that ING Direct goes bust, 100% of the first €100,000 (around £78,000) will be guaranteed. However its important to understand this is NOT protected by the UK scheme but by the Dutch Investor Protection Scheme, meaning it would have to be claimed from the Netherlands authorities."
(http://www.moneysavingexpert.com/savings/safe-savings#iceland)

Or is there a 100% safe account that is guarenteed by the UK government?

Thanks - Lou

LardyCake

louloulouisa wrote: »

...
Or is there a 100% safe account that is guarenteed by the UK government? ...

Yes, see here: http://www.nsandi.com/

louloulouisa

Thanks for all your reply's, my Mum is now thinking of transfering it to alliance & leicester. ...hope that's safe?

SkipClick

louloulouisa wrote: »

Thanks for all your reply's, my Mum is now thinking of transfering it to alliance & leicester. ...hope that's safe?

They part of Santander group avoid stick to the UK!

louloulouisa

Oh, no! there no good either, who shall I tell her to go with? who is safe?

amcluesent

>who is safe?<

Northern Rock, National Savings are 100% govt. backed.

1echidna

louloulouisa wrote: »

Oh, no! there no good either, who shall I tell her to go with? who is safe?

Safe is an absolute term, to some pessimists not even the gov't is safe. I would suggest that Alliance and Leicesters owner Santander is a very big European bank and deposits are guaranteed by the UK FSCS. To all intents and purposes it is safe.

dag_2

However its important to understand this is NOT protected by the UK scheme but by the Dutch Investor Protection Scheme, meaning it would have to be claimed from the Netherlands authorities."

I realise that's what Martin said, but I have my doubts as to whether it's actually correct.

My understanding is that ING Direct is registered with the FSCS; it's just that if you have to make a claim, the money would come from the Dutch protection scheme rather than the FSCS kitty. But I think you'd still make your claim to the FSCS, like what happend with Icesave.

I agree with 1echidna about who is safe; I think it's a fallacy to think that nation state governments are "safe" - after all, look what happened to Iceland.

You could stick the money under the mattress, but then it's prone to risk of theft, flood or infestation. You could stick it in a safety deposit box, but then, it's possible that the insurance company you insure it with might go bust too.

Currency itself is also at risk; any currency can devalue. The risk of devaluation is the same regardless of whether you stick it in a bank or under the mattress. If you want to protect yourself against the risk of devaluation, you'd buy lots of gold. However, again, there are risks involved with the storage of gold, or entrusting others to look after gold for you.

The point I'm making is that there are risks associated with putting money in a bank, and there are risks associated with keeping money under the mattress. Some of those risks are the same (eg currency devaluation) but some of them are different - but they both have risks.

So it's not a black and white issue. But on the other hand, it helps to keep things in perspective. The "core tier 1 ratio" is one reasonably good measure of how "safe" a bank is; it's basically a measure of how difficult it is for the capital investors (eg shareholders) to pull their money out in a hurry, divided by a measure of how risky the bank's assets (eg mortgages and lending) are. Generally speaking, the bigger the core tier 1 ratio figure is, the safer the bank is, although this isn't the only way of sizing up a bank's "safety".