Santander-Am I a fool busting the FSCS limit with this bank?

roddydogs

JimmyTheWig wrote: »

It depends on how losing the money would affect you.
If it would just be a case of losing money then you may be happy leaving it there on the basis that you'd rather have the guaranteed interest than guard against such a giant of a bank failing.

But if this money is needed for something specific (e.g. you are between house moves and you need it to buy the house you want) then the risk of losing it probably outweighs the interest gained by leaving it where it is.

You are covered for up to £1 million for 6 months for a "liftime event", ie buying a house between moves.

colsten

Sam_J12 wrote: »

People are grossly overstating the risk here. No person in the UK has EVER lost money deposited in a UK bank. Ever. This includes Northern Rock despite people citing it here multiple times. Being a bit over the 75k limit is nothing to worry about.

I hear echoes of "banks are safe as houses". Funnily enough, that phrase hasn't been heard much since 2007.

To suggest that because no person in the UK has lost any money from bank deposits in the past should mean that this will stay so in the future is just plain foolish.

colsten

Malthusian wrote: »

Hey, Lewis was proved right. The UK Icesave savers got every penny of their money back, at the expense of British banks.

Which bank(s) paid how much to the Icesavers?

JimmyTheWig

roddydogs wrote: »

You are covered for up to £1 million for 6 months for a "liftime event", ie buying a house between moves.

Yes, I'd forgotten that when I posted.
But my point still stands if you've been in that situation for more than 6 months, or for other circumstances where you'd hit problems if you didn't get all of the money back.

jennifernil

smjxm09 wrote: »

3% on bank accounts and 2.3% on isa's with Santander. I would not want to fix an isa's longer than 2 years as I think rates will eventually climb.

I can't move any more money to new current accounts as I have plenty at the moment and have run out of standing orders to feed any new accounts. I have already maxed out accounts that don't require standing orders like the TSB and Tesco Bank so this takes me back to my opening question. Do I take an interest rate cut and move an ISA? I find it hard to believe the Stantander could go bust with not a hint in the press first about its pending demise.

If you haven't got Club Lloyds @4% you should look into that. Easy to get 2 DDs to 2 Tesco accounts.

BOS 3% does not need any DDs.

Also as said, Monthly Savers @ 6%. 5%, and 4%.

Malthusian

Which bank(s) paid how much to the Icesavers?

All UK banks and £1.1bn, via the Financial Services Compensation Scheme. Link

A subplot worthy of Atlas Shrugged. You lose business to Icelandic banks paying higher rates than you can offer, it turns out they can't offer them either, they go bankrupt, you now have to give your ex-customers all their money back in full. Who pays? In the end, the depositors who stayed put and didn't bet all their money on Reykjavik.

It's like telling the father of the prodigal son that it's not good enough just to kill the fatted calf, he must take the dutiful son's share of the estate and give it to the prodigal son so he has all the money he lost back again.

kidmugsy

Have you filled up with the regular savers that pay 4%, 5%, and 6% p.a.? If not, do so, running down your capital at Santander thereby.

Sam_J12

colsten wrote: »

I hear echoes of "banks are safe as houses". Funnily enough, that phrase hasn't been heard much since 2007.

To suggest that because no person in the UK has lost any money from bank deposits in the past should mean that this will stay so in the future is just plain foolish.

It is not foolish in the slightest. It is strong evidence that the UK government won't allow it to happen, and it is extremely unlikely to happen. The UK government has even repaid investors in foreign banks when there was absolutely no legal requirement for them to. What happens in the past is often a very good indication of future events, despite the commonly cited financial advice to the contrary.

colsten

Sam_J12 wrote: »

It is not foolish in the slightest.

Well, you think it's not foolish in the slightest, and I think it is utterly foolish. One of those times where it's best to agree to disagree.

As a parting comment I'd like to add that your line of argument would make the existing FSCS complete nonsense.

Sam_J12

colsten wrote: »

Well, you think it's not foolish in the slightest, and I think it is utterly foolish. One of those times where it's best to agree to disagree.

As a parting comment I'd like to add that your line of argument would make the existing FSCS complete nonsense.

Not at all. The FSCS covers far more situations than just bank deposits. And one of the reasons it exists at all is to discourage runs on the banks, which decreases the chances of banks collapsing and that the government having to bail them out. The government has already demonstrated it will protect bank customers well beyond the FSCS limit. And remember that nobody has ever lost money deposited in a UK bank due to a bank failing. Ever.