spreading between fixed rate's,but what if they merge?

exiged

Hello people.

Lets say i had savings of 50k with the AA and 30k in say northern rock,both in no access 2 year fixed rates.At the moment i should be safe as there completely independant.But what if they ended up merging down the line becoming one institution,and i now have 30k over the safe limit.due to being fixed rates i cant take that 30k out without penalty.Is this just a risk we have to take or does anyone know of a legality which enables you to reduce your sum to the fsa safe cover amount when banks or b.s merge?

thanks

Baldur

Whether institutions merge or not doesn't matter, what matters is whether or not they remain separately authorised by the FSA after the merger.

As far as I'm aware, there is no blanket FSA/FSCS cover but the following item shows what the FSA did in June in these circumstances - http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/5445796/FSA-extends-deposit-protection-for-merging-building-societies.html.

exiged

Cheers for the info,theres some exact detail on this on the FSCS website,im not allowed to post the link being a newbie

nilrem_2

TBH I really don't quite understand why people worry about the £50k limit in UK institutions still, for a start I do not know of any saver who had or has savings in a UK institution who has lost anything in spite of the most serious financial problems in possibly the last 100 years, we have seen banks fail yet the government has made sure that savers have not lost money, IMHO even sticking to the £50k limit will not help because in the highly unlikely event of complete financial meltdown then such would be the mass panic to withdraw funds (even from 'safe' banks) that even if you had your money at home it would soon be worthless!

People seem to forget that the actual paper money is really worthless it's the trust behind it that matters!

It's always a good idea to spread ones savings around anyway for convenience sake but I really do think that people have become a little paranoid about panicking about the £50k limit.

exiged

nilrem wrote: »

TBH I really don't quite understand why people worry about the £50k limit in UK institutions still, for a start I do not know of any saver who had or has savings in a UK institution who has lost anything in spite of the most serious financial problems in possibly the last 100 years, we have seen banks fail yet the government has made sure that savers have not lost money, IMHO even sticking to the £50k limit will not help because in the highly unlikely event of complete financial meltdown then such would be the mass panic to withdraw funds (even from 'safe' banks) that even if you had your money at home it would soon be worthless!

People seem to forget that the actual paper money is really worthless it's the trust behind it that matters!

It's always a good idea to spread ones savings around anyway for convenience sake but I really do think that people have become a little paranoid about panicking about the £50k limit.

Yeah i see where your coming from,but peace of mind helps the masses sleep at night.If the FSCS tells me my money's safe under these conditions,im inclined to believe them for the sake of my sleep pattern's. :cool: