Did you know? How safe are savings?

Littlejoan

I opened an account with Alliance & Leicester and when I received my account details recommended one of my brothers and also my husband. How long does it take to receive the £50 for introducing new accounts? I've paid the required £500 but don't want to put another £500 in this month as well really otherwise I'm losing the interest I could be earning with my Cahoot account. I've never taken part in this chat forum so I hope I've done it correctly.

YorkshireBoy

Littlejoan wrote:

I've never taken part in this chat forum so I hope I've done it correctly.

Would have been better to start a new thread, but since you've asked...looks like 8 weeks, according to...

http://www.alliance-leicester.co.uk/currentaccounts/index.asp?page=recommend-friend&ct=curraccmenu

Mr_Mumble

ffacoffipawb wrote:

How do you define "bank" here?

Say you had £35k with Cahoot and £35k with Abbey (who own cahoot) do you get :

(a) £2k plus 90% of £33k back from Cahoot PLUS the same bqck from Abbey; or

(b) £2k plus 90% of £33k from cahoot and nothing for your Abbey account as you already had an account with Cahoot?

(Note that I am not implying Abbey is dodgy, just using it as an example. Another example could be Intelligent Finance and HalifaxBOS. Or HSBC and First Direct.)

(b) seems closer to the mark. According to the FSA site:

"Only one compensation limit applies to the total amount you have in accounts held with different branches/divisions of the same authorised firm."

http://www.fsa.gov.uk/consumer/01_WARNINGS/compensation/mn_deposit.html

For all the examples you use the Internet branding is described as a "division" on the websites of First Direct, Cahoot and IF. This aspect is less clear for other firms. Smile is described as "part of" co-op bank on its website and Smile is not a separate authorised firm based on the FSA's database so it looks like you're only covered to £35,000 with those two as well. This could take a long time to research, how about someone who had money in: Clydesdale and Yorkshire Bank; Coutts and RBS; HFC and HSBC; Woolwich and Barclays...?

If you invested in National Savings' new savings account, I presume that the cover is 100% with no limit as it is guaranteed by the Government?

Legally you are lending to the government if you have dealings with the NS&I and the FSA rules don't apply:
http://www.fsa.gov.uk/consumer/09_SAVINGS/your_rights/mn_ns_your_rights.html

mumble out.

cheerfulcat

Pal wrote:

However I also think that anyone with more than £35k to invest is probably being a bit daft saving it in a cash savings account, unless they are planning to spend it all within the next 12 months.

That depends on a) how much more than £35k they have and b) how bullish ( or not ) they are feeling. This last couple of weeks would have been a good time to be in cash...it might be worth mentioning here that there are also limits to the compensation available if your broker or investment provider ( insurance/investment company ) goes bust, so you need to spread it around a bit.

madfrenchgirl

OK not to scare people off: BARINGS!

Stonk

Barings, indeed. Banks *do* go bust from time to time. It's extremely rare, but it does happen, and I am not prepared to lose any significant chunk of my life-so-far's savings if it does. It's just too much of a loss to contemplate. Therefore I keep a maximum of £35K per institution.

It's like insurance - if you can't afford a possible loss, you take out insurance against it. In this case, the insurance policy is having multiple accounts. The cost is a slight loss in mean interest rate.

I think it's a good idea to have multiple accounts for another reason - if you have all your eggs in one top-paying account and they drop their rate, then it hits hard. But if you've spread it around then you are hedged against odd random rate drops.