Northern Rock

HMB_2

Help....I was just about to put a large proportion of my savings into the new 3.7% 1 yr fixed rate bond from Northern Rock based on Moneysavingexpert guide that even funds over the £50k FSA limit was 100% guaranteed by the government.

THEN yesterday read a news article from SKY news that the government was about to split NR into 2 parts, in a matter of weeks, and would try and sell the banks retail deposit base.

If I invest now will my funds over the £50k still be guaranteed if the sale does go ahead, or should I split the funds between several banks/building societies?

treecity

Sorry but I don't know the answer to your question but I think unless our savings remain guaranteed in NR, we could end up with an almost run on the bank again as people withdraw huge amounts to get back to the 50K threshold. Almost going full circle in this whole fiasco!

HMB_2

Interestingly I phoned Northern Rock, and they said that if you had a fixed rate bond then it would be 100% guaranteed until the end of the fix, (Even if the company were sold) no matter how large the investement.

If you had an instant access account then they said that they would give 90% notice that the amount guaranteed was now £50k per account holder under the FSA rules.

Gymgenius

Linky to the report on splitting the rock.