Government guarantee Northern Rock savings only 6 months?

lolly5648

Someone told me that the government's pledge that NR savings are safe only lasts for 6 months as EU policy forbids further help after that time. Has anyone else heard this?

munk

They knew NR wouldn't go under in the first place, that's the only reason why they gave any kind of 'guarantee'. If it were a smaller company (well, actually any company) with bad books they'd have stayed well clear.

Sorry, no idea about your question though!

molly_mandy_2

This is the new extended guarantee offered by Northern Rock in their email dated today :

Dear Customer(s)
Further news from Northern Rock: "All Retail Deposits are safe with us"
Northern Rock has agreed an extension of the guarantee arrangements provided by the Bank of England and HM Treasury, which brings enhanced protection for all of our savings customers - existing and new.
HM Treasury has announced that it will extend the guarantee arrangements already provided for existing deposits to cover new deposits made with Northern Rock. This protects all savers in all accounts, regardless of the amount deposited and applies to all existing and new accounts.
These arrangements also cover all future interest payments, movements of funds between accounts and term deposits for the duration of their term. These extended guarantee arrangements will remain in place during the current instability in the financial markets.
If you would like to invest further funds with us, you may do so by BACS (Bankers Automated Clearing Services) or CHAPS (Clearing House Automated Payment
System). For full details of how to pay money into your Account via these methods, including the sort-code and account number required, please log into your Account and select 'Customer Services' from the right hand menu.
If you withdrew your funds between 13 September 2007 and 9 October 2007 and you paid an interest penalty charge or a CHAPS (telegraphic transfer) fee we will refund those charges to your Account, provided you reinvest into your original Account by Wednesday 31 October 2007. As a further incentive, we will also add any interest you may have lost due to closure or withdrawal during that period.
Alternatively, to deposit funds into your Account by cheque, please make this payable to 'Northern Rock for the account of (insert Account Holder(s) Name(s))' and crossed 'A/c Payee only'. Please also quote your Account Number on the reverse.
I want to offer you my reassurance and make it clear to all Northern Rock customers that we are open for business and continue to be a safe place for your savings. Above all I would like to thank you for your continued support and understanding.
Yours faithfully

Adam J. Applegarth
Chief Executive

dougs

molly_mandy wrote: »

If you withdrew your funds between 13 September 2007 and 9 October 2007 and you paid an interest penalty charge or a CHAPS (telegraphic transfer) fee we will refund those charges to your Account, provided you reinvest into your original Account by Wednesday 31 October 2007. As a further incentive, we will also add any interest you may have lost due to closure or withdrawal during that period.

have they extended this offer then as the email I got (21st Sept) said that the funds had to be transferred back in by October 5th?

If the offer has been extended to Oct. 31st then this is worth doing because they are offering to give you any lost interest while the money was withdrawn, whereas that money has also been earning interest where it was moved to during that time.

For example if you had removed say £100k on 14th September and plonked it in another HI account where it has been earning interest ever since, you could move that money back to NR on Oct 30th and NR will pay you interest on that money from the withdrawal date of 14th Sept to Oct 30th. So the money would have been earning double interest for that period 14/09 to 30/10 because both institutions are paying interest on it. Or am I missing something really obvious here

molly_mandy_2

That email I quoted above was sent on 17 October, so I assume that is their new extended offer.

As far as I can work it out - as long as you return all the money you withdrew, back into the same account, then they will pay all the interest you would have received had it not been withdrawn. So in effect, you will get that interest and any interest you got in the account you deposited it in. So interest from both institiutions I guess. They have to compensate us somehow I suppose to keep us