HSBC Safety

MarcoM

Hello,


I am of course aware of the 85k limit for government protection but as I have sold some of my investments in order to purchase a property I was wondering what people's views were in terms of storing all these proceeds with one bank bearing in mind that the sum is well above the protection threshold.
Said bank would be HSBC.
I could open other accounts but would not make much more interest than the 0.65% cash ISA interest offered by HSBC who I already bank with.
In a nutshell, would you trust a bank like HSBC with all of your funds for a period?


Thanks

Money_Help

There is a temporary high balance protection offered by the Financial Services Compensation Scheme up to £1 million: https://www.fscs.org.uk/what-we-cover/questions-and-answers/qas-about-temporary-high-balances/

But I don't believe this will apply in your circumstances if you have just sold investments that were already yours.

Apart from that you are right in saying the only protection is the £85k. So who knows what will happen to HSBC. Will the government allow a bank like that to fail but then again would taxpayers be able to stomach another bank bailout?

CatLady13

NS&I have protection up to £1million, might be worth putting your money in their savings account or income bonds if you are concerned.

Glen_Clark

MarcoM wrote: »

Hello,
In a nutshell, would you trust a bank like HSBC with all of your funds for a period?

I would - we have to take bigger risks than that every day.

Glen_Clark

Money_Help wrote: »

would taxpayers be able to stomach another bank bailout?

When were we ever given the choice?

jamei305

CatLady13 wrote: »

NS&I have protection up to £1million, might be worth putting your money in their savings account or income bonds if you are concerned.

Their protection is unlimited, only capped by the maximum balance per account. For example you can have £2 million in an investment account at 0.95%

The problem with them is that their ISA doesn't allow transfers in. So if you have a large ISA balance to protect, NS&I won't be useful.

planteria

NS&I is a a good shout, but fwiw i wouldn't have any concerns for the 'safety' of cash in HSBC accounts.

MarcoM

jamei305 wrote: »

Their protection is unlimited, only capped by the maximum balance per account. For example you can have £2 million in an investment account at 0.95%

The problem with them is that their ISA doesn't allow transfers in. So if you have a large ISA balance to protect, NS&I won't be useful.

hit the nail on the head there.
I did look at NS&I but the money is in ISA.

MarcoM

Glen_Clark wrote: »

I would - we have to take bigger risks than that every day.

I guess this Epicurean approach to the issue is probably a wise path to follow.

Eco_Miser

If you are about to buy a property to live in (you've made an offer?), the temporary high balance provision would apply.
If you've merely withdrawn the money to be sure of the amount when you get round to buying, it won't.

If you're about to spend the money, there doesn't seem to be any point in keeping it in the ISA wrapping if you can get a better return elsewhere, but how much would you get anyway, since it's about to be spent.

MarcoM

Eco_Miser wrote: »

If you are about to buy a property to live in (you've made an offer?), the temporary high balance provision would apply.
If you've merely withdrawn the money to be sure of the amount when you get round to buying, it won't.

If you're about to spend the money, there doesn't seem to be any point in keeping it in the ISA wrapping if you can get a better return elsewhere, but how much would you get anyway, since it's about to be spent.

No offer as yet just looking. Possible offer territory within the next week or so.


I see your point about ISA and all that however I am not banking on necessarily finding a property we like soon and having an offer accepted as vendors and EAs are currently overpricing stock.
So as it has taken us years to have a decent ISA holding I would be reluctant to get rid in case I then decide to re enter the stock market, at least partially.