NatWest just told me savings bonds covered by extra 48K in addition to the FSCS 50K

Squibbler

I am totally confused and cannot find any information about this on the "Is your money safe?" pages.

I just spoke to my local branch of Natwest who told me that if I take out a savings bond with them, it is covered separately by the FSCS as an investment. I had never heard of this before.

I called my B Soc Nationwide H/office to see what they knew of this - they told me they had never heard of it within Nationwide and just a single 50K applied to each whole institution, irrespective of whatever products you took out.

I then called NatWest H/ Office and was told the same as by their branch - that a further 48K separate "investment" cover by the FSCS was applicable to their savings bonds which was entirely separate from the 50K cash cover.

I called the FSCS and they said this was not the norm with most financial institutions but was perfectly possible if that is how NatWest had decided to define their products. He advised me to get someone in NatWest high up to put this in writing. What he also said was that this isn't preagreed with the FSCS and payouts etc are sorted out once an institution goes under. I found this odd as since the FSCS is effectively the insurer, shouldn't they be setting the decisions on these things?

This seems quite an important issue. Is anybody able to clarify this for us whether NatWest do in fact have additional cover for savings bonds as it may affect other institutions too and the maximum we can save with them?

Lokolo

Its not savings.

Its an investment.

Savings is £50k per institution. Investments have a different structure.

[edit] theres another thread on this somewhere, Ill try to find it!

Squibbler

Thanks - I'd appreciate that.

It's certainly the first i have heard about it. I find the whole definition of investment & savings very confusing. Isn't any savings account with interest an investment?

Natwest seem to make the split but not Nationwide and the FSCS say it is unusual to do so.

It might be helpful to get some clarification of this on the Is your Money Safe page as as far as I can see, it is not mentioned.

So with certain institutions we can invest up to 98K it seems if we pick our products carefully and still be covered fully by the FSCS. I'm wondering which other institutions do this.

I sold a house last year after my mother died, and the money needs to be put somewhere. It is quite important to me to know the max I can save with a particular FI.

Lokolo

Squibbler wrote: »

Thanks - I'd appreciate that.

It's certainly the first i have heard about it. I find the whole definition of investment & savings very confusing. Isn't any savings account with interest an investment?

Natwest seem to make the split but not Nationwide and the FSCS say it is unusual to do so.

It might be helpful to get some clarification of this on the Is your Money Safe page as as far as I can see, it is not mentioned.

So with certain institutions we can invest up to 98K it seems if we pick our products carefully. I'm wondering which other institutions do this.

Yes

£50k with savings.
£48k with investments.
http://www.fscs.org.uk/consumer/key_facts/limitations_of_the_scheme/compensation_limits/

Investments put your capital at risk.
Savings do not.

Theres a big difference between them.

YorkshireBoy

Squibbler wrote: »

Is anybody able to clarify this for us whether NatWest do in fact have additional cover for savings bonds...

Are you sure they're not talking about Guaranteed Equity Bonds (GEBs) or the like?

Squibbler

YorkshireBoy wrote: »

Are you sure they're not talking about Guaranteed Equity Bonds (GEBs) or the like?

No I asked specifically about Savings bonds and checked with their Head office too. There doesn't seem to be any capital risk with savings bonds.

Lokolo

YorkshireBoy wrote: »

Are you sure they're not talking about Guaranteed Equity Bonds (GEBs) or the like?

I thought GEBs count as cash towards FSCS?

http://www.nationwide.co.uk/investments/guaranteed-equity-bond/overview/geb.htm?source=nationwide&campaign=hotspot&execution=geboverview_geb_100909

Here it says

While invested, your money is held by Nationwide as the deposit taker. If Nationwide becomes insolvent, you may be entitled to compensation under the Financial Services Compensation Scheme. Deposit accounts are covered for 100% of the first £50,000 of each customer’s claim.

Lokolo

Squibbler wrote: »

No I asked specifically about Savings bonds and checked with their Head office too. There doesn't seem to be any capital risk with savings bonds.

Then you cannot get £98k compensation.

Dunstonnnnn where are yoooooou.

Squibbler

Lokolo wrote: »

I thought GEBs count as cash towards FSCS?

http://www.nationwide.co.uk/investments/guaranteed-equity-bond/overview/geb.htm?source=nationwide&campaign=hotspot&execution=geboverview_geb_100909

Here it says

This is NatWest not Nationwide that i am talking about.

Squibbler

Lokolo wrote: »

Then you cannot get £98k compensation.

Dunstonnnnn where are yoooooou.

I was told by Natwest 50k for cash and savings bonds (counted as an investment) an extra 48k, total 98K

Lokolo

Squibbler wrote: »

I was told by Natwest 50k for cash and savings bonds (counted as an investment) an extra 48k, total 98K

Yes.

So it is an investment.

Not savings.

Which means capital risk. Unless its a GEB... see below