Having large sum in bank account for 2 months - are the banks safe?

SilverSix

I've recently surrendered my inherited bonds & shares, my own bonds, shares & ISA and also have money from the sale of my fathers house, who passed away two years ago, in an account.

I currently have around £82,000 in a MySave account with Nationwide. Once all my other funds reach my bank acount it'll be nearer to £220,000.

I'm completing on a house in October so this money has about 2 months to earn me interest before it's spent as such. It's currently making 0.2% net per month (2.4% net pa). It may not be the best deal now but at the time of looking it was.

My only minor concern is that funds are only protected or guarenteed to £50,000 is it? per banking group.

Considering the current economic climate are the UK banks relatively safe? more so the bank group in which Nationwide falls in to?

Thanks,

Ben

System

Whatever the protected limit (£85,000?) in reality if a major UK bank ever failed and defaulted on its customers then it would be the end of the UK financial system.
There would be a mad scramble to pull out every penny from every other bank and institution, and probably riots as looters turned on the banks.

There would be a lot more to worry about than a mere £200,000. The nominal limit is just a confidence trick. Any government that hesitated to bail out the banks unconditionally would collapse.

opinions4u

Nationwide is an independent building society that also operates Chesire and Derbyshire brands. It's not a bank.

It's still covered by the same £85k FSCS limit (£170k for joint accounts, so joint accounts with 2 different banking licences or single account with 3 should sort your concerns out).

ERICS_MUM

Clifford_Pope wrote: »

Whatever the protected limit (£85,000?) in reality if a major UK bank ever failed and defaulted on its customers then it would be the end of the UK financial system.
There would be a mad scramble to pull out every penny from every other bank and institution, and probably riots as looters turned on the banks.

There would be a lot more to worry about than a mere £200,000. The nominal limit is just a confidence trick. Any government that hesitated to bail out the banks unconditionally would collapse.

You put it so well. I try to say this on several forums (ex-banker) but not so succinctly.

steady__eddie

I endorse what the previous posters say but the truth seekers appear to have a different view on this one. If you do not wish to be depressed and panic, look away now.

http://www.edgemediatv.com/forum/topic.asp?TOPIC_ID=3763

SilverSix

Thanks for the replies:

steady__eddie wrote: »

I endorse what the previous posters say but the truth seekers appear to have a different view on this one. If you do not wish to be depressed and panic, look away now.

http://www.edgemediatv.com/forum/topic.asp?TOPIC_ID=3763

So that puts a rather large lump in my throat...

If I were to transfer £67.5k in to my mothers and brothers accounts leaving £85k in mine. My money would all be covered?

As opening an account with another bank for 2 months seems like a bit of a ballache.

Should any of that information be true. The sceptic in me raises an eyebrow at a bunch of strangers on a forum with a 'hunch', however there's also a part of me that isn't ignoring it.

opinions4u

Nobody can say with any certainty how safe one bank / building society is compared to another.

While the FSA should know the score, the second they say "Nationwide is teetering on the brink" they effectively kill it off as there would be a run on the bank.

September / October is an interesting time for financial services. Northern Rock effectively collapsed in September 2007. I think the Icelandics, RBS and HBOS went in 2008. A lot of funds moved out of these providers in search of a safe haven, sometimes to discover that the safe haven wasn't quite as secure after all! One of those safe havens was certainly perceived to be Nationwide.

In other words, Sept / Oct is a time where banks and building societies have to be careful around their inflows and outflows.

Are Nationwide in trouble? I sincerely doubt it, but I don't know the make up of their wholesale funding, when they need to renew etc. One thing that doesn't impact them as significantly is the sovereign debt problem in Europe. Others have bigger exposure there.

As for the linked thread? I'd go as far as to say it's dangerous to publish that sort of stuff on a public forum.

Jegersmart

opinions4u wrote: »

Nationwide is an independent building society that also operates Chesire and Derbyshire brands. It's not a bank.

It's still covered by the same £85k FSCS limit (£170k for joint accounts, so joint accounts with 2 different banking licences or single account with 3 should sort your concerns out).

It should also be made clear that the "FSCS" limit is actually a "taxpayer" limit - i.e. we pay and guarantee our taxed savings with taxed earnings - so to be honest we should be able to decide how much is "guaranteed"...:D

opinions4u

Jegersmart wrote: »

It should also be made clear that the "FSCS" limit is actually a "taxpayer" limit - i.e. we pay and guarantee our taxed savings with taxed earnings - so to be honest we should be able to decide how much is "guaranteed"...:D

The FSCS is financed by a levy on the industry, not the taxpayer.

Granted, the taxpayer has had to lend the FSCS an obscene amount to deal with Bradford and Bingley's collapse, and the taxpayer owns significant stakes in 3 banks, but

crittertog

steady__eddie wrote: »

I endorse what the previous posters say but the truth seekers appear to have a different view on this one. If you do not wish to be depressed and panic, look away now.

The Nationwide is the largest building society in the country, somewhat dwarfing the next largest, and having what looked to be healthy accounts. I would be very surprised if the predictions of its failure in the linked thread became true..!

SilverSix

opinions4u wrote: »

Nobody can say with any certainty how safe one bank / building society is compared to another.

While the FSA should know the score, the second they say "Nationwide is teetering on the brink" they effectively kill it off as there would be a run on the bank.

September / October is an interesting time for financial services. Northern Rock effectively collapsed in September 2007. I think the Icelandics, RBS and HBOS went in 2008. A lot of funds moved out of these providers in search of a safe haven, sometimes to discover that the safe haven wasn't quite as secure after all! One of those safe havens was certainly perceived to be Nationwide.

In other words, Sept / Oct is a time where banks and building societies have to be careful around their inflows and outflows.

Are Nationwide in trouble? I sincerely doubt it, but I don't know the make up of their wholesale funding, when they need to renew etc. One thing that doesn't impact them as significantly is the sovereign debt problem in Europe. Others have bigger exposure there.

As for the linked thread? I'd go as far as to say it's dangerous to publish that sort of stuff on a public forum.

Thanks.

Whilst it may be plain sailing for Nationwide given that most banking wobbles tend to happen around the time I'm due to complete on my house I'd rather not have to risk a potential heart attack!

I think I'll get my mother & brother to open up identical accounts and plonk the remaining two thirds of my money in to each. This way is a bit of a no brainer = security & no interest lost.