Are my Savings safe? Discussion Area

Former_MSE_Dan

This is the discussion area for the new article:

Are my savings safe?: Save up to £315,000 at top rates in perfect safety

Please click reply to discuss

MSE_Martin

Hi folks,

I know there've been many questions about the table in the article, so please let me clarify:

The table is the article is NOT a table of WHO OWNS WHO.

It is a table of which institution counts as the same institution or not depending on whether it has a seperate FSA regulation for savings products.

Some conglomerate banks (like Halifax and Bank of Scotland) are the same institution; others (RBS and NatWest) aren't. So it isn't as simple as it seems.

Martin

PS Apologies to all those who had been in the discussion before. It was quite confused and I was worried newbies would misunderstand some of the questions; so I decided to restart the discussion with the above clarification.

mikeh

Sorry to be pedantic, but Nationwide is listed in your table of banks even though it is still a building society.

Not relevant to "who is covered by which FSA licence" discussion but it is relevant to those savers who are interested in proportion of funds that an institution is allowed to raise on wholesale money markets.

mashmash_2

How are debts dealt with in this situation? - If I've taken out a loan and owe the bank money when it goes bust, then I'm guessing I'll probably still owe that money to somebody afterwards? - Either the receivers or the government will probably want it to help pay back savers?


If that's the case, then does anybody know how offset mortgages would be dealt with when it comes to this guarantee (or more generally, debts and savings at the same institution)?

If you have a single account (such as the Virgin One), then it'll always have a negative balance and I guess it'd be treated as a single loan. But some banks will offset your deposits in other accounts with them when calculating mortgage interest.

E.g., If have a £200k offset mortgage, with £210k in an offset savings account, then in the event of the bank collapsing am I treated as having £10k savings, which are therefore fully guaranteed? Or am I treated as having £210k savings with only £35k of that guaranteed, and a £200k mortgage that I still have to pay - thus I'm out of pocket to the tune of £175k?

chris1

Does the guarantee include interest accrued but not paid?

For example, if you had say £33K in an account and the bank defaulted just before your annual interest of say £2K+ was to be paid, would you be covered for £35K or just the capital of £33K?

alhal

Hi Martin,

You say that £315,000 spread over 9 banks is a safe investment - but is it the best use of the money?

I am in my early 70s and averse to playing the stock market - so might government bonds be a better bet? Or can you suggest some other safe haven?

Regards,

Alhal

Jonbvn

alhal wrote: »

Hi Martin,

You say that £315,000 spread over 9 banks is a safe investment - but is it the best use of the money?

I am in my early 70s and averse to playing the stock market - so might government bonds be a better bet? Or can you suggest some other safe haven?

Regards,

Alhal

I would suggest you have a look at www.nsandi.com who are 100% backed by the treasury. As you can see from my numerous posts on the subject, I love the index linked savings certificates.:p

100% guaranteed to beat inflation
100% guaranteed by the treasury
100% tax-free
What a combination!

MSE_Martin

Hi Martin,

You say that £315,000 spread over 9 banks is a safe investment - but is it the best use of the money?

I am in my early 70s and averse to playing the stock market - so might government bonds be a better bet? Or can you suggest some other safe haven?

Regards,

Alhal

In general, yes - thats the point of saying there are nine accounts as all of them pay top rates. While NS&I is 100% government back, much of its returns are very poor. The inflation linked savings give you a decent return though often not table topping - but you have to lock your cash away.

So if you're looking for total safety then spreading your cash aroudn the top paying savings accounts does that (though personally I think its a touch of overkill).

Martin

HardToPlease

I found your article about savings very useful, especially the table of connected institutions. Unfortunately, as one of the 10% of males who are colourblind, I needed assistance in figuring out which was connected with which. Perhaps, you could put some annotations on the table as well.

HardToPlease

As a Northern Rock investor, I am intending to put the proceeds of the sale of my house (half a million pounds) into my savings account where, it would seem, it is now the safest place of all. However, Northeren Rock say...

"[FONT=Verdana,Arial,Helvetica,sans-serif]The Chancellor has made it very clear that all existing savings accounts with Northern Rock are guaranteed safe and secure during the current instability in the financial markets."

How will we know when this current instability ends and the guarantee reverts to the normal, unsatisfactory one?
[/FONT]

Julie_ABCEDEFGHIJ

Hi All

I am very interested in following the developments of the Government's "promise" to guarantee savers money. I too have sold my house and placed the proceeds into Bradford and Bingley - offshore. I am living in France and waiting for the inevitable House Price Crash before buying another house to return to in the UK. My question is, how safe are my savings in an offshore account? Do the same guarantees apply? As a non UK resident - it is difficult to open these savers accounts without a UK address. Any advice would be very welcome.