how safe is our money?

palacelino

We are in the process of buying a house with a large deposit. I am nervous about having all the deposit money in one place in advance of completion. Is there any kind of insurance we can put in place to cover us for a short period of time in the unlikely event of a bank going under?

kalaika

If a bank does go under, the Government will guarantee to protect up to £50,000 per institution, per person. So if you and your partner have a joint account containing £100,000 (assuming you have no other accounts with the same bank) then you will automatically be protected for the full amount.

See http://www.moneysavingexpert.com/savings/safe-savings for more details.

LandyAndy

To be honest I think there will be many things more pressing to concern yourself with in buying a house. This is just unnecessary stress.

maninthestreet

palacelino wrote: »

We are in the process of buying a house with a large deposit. I am nervous about having all the deposit money in one place in advance of completion. Is there any kind of insurance we can put in place to cover us for a short period of time in the unlikely event of a bank going under?

Your level of paranoia will go off the scale once you hand this deposit money over to your solicitor.

lincroft1710

I have a much better idea!

Just put money under mattress in your bedroom. PM me your address, leave your key under the mat and I'll come and personally look after the money while you're at work.

Simples!

kmmr

The FSA is consulting (CP09/11) on a change to the FSCS protection scheme to cover this exact scenario. If you have up to £500k held 'temporarily' either in your own account, or held in trust for you in your solicitors account, then you are covered. It only applies if the balance is temporary in nature, and while 'temporary' isn't defined, it would tend to mean up to 6 months.

It's designed to cover things like a delay between selling and buying, or receipt of a large pension/inheritence payout and you haven't worked out how to invest it yet.

Still consulting, so it won't help you if you insist on worrying about it now!

bitsandpieces

If you're concerned, you could put the money in £50k chunks with different institutions. This will create more hassle, though - opening accounts and when you transfer the cash - and leave you paying more transfer fees. You need to decide whether that's worth it.

Alternatively, does the solicitor's insurance cover money on deposit with them? If so, you could just pay them the deposit early (though you will lose interest on the money).