The Top Easy Access Savings Discussion Area

masonic

BooJewels said:

masonic said:

TiVo_Lad said:

BooJewels said:

masonic said:

Doctor_Who said:

masonic said:

Doctor_Who said:

SanguineOnSaturn said:

Is there a list of other clearbank accounts to see how the fscs 85k might be shared among multiple institutions?

Do you mean whether ClearBank has a shared banking licence and so may share FSCS protection? If so the answer is no:

This bank isn't linked to any others, for savings safety purposes

This means the £85,000 per person protection isn't shared between any other banks.

https://www.moneysavingexpert.com/savings/safe-savings/

I think the poster was looking for a list of providers using ClearBank's licence, of which there are several, including Chip and Raisin.

I've always used the MSE page to check if financial institutions are linked for FSCS protection - is this giving incorrect information regarding ClearBank? I have money with Chip and Raisin, presumably the FSCS limit would apply to money in the Raisin holding account (ClearBank) and Chip? I never keep money in the Raisin holding account for longer than necessary!

https://www.moneysavingexpert.com/savings/safe-savings/

No, it isn't giving incorrect information because neither Chip nor Raisin are banks. However, you'd be wrong to take away from that result that you could hold £85k in a Chip savings account provided by ClearBank AND have additional cover for money in Raisin's holding account provided by ClearBank. To be fully covered for the FSCS, your total balance across all accounts provided by ClearBank must not exceed £85k.

The situation is the same as if you held a large cash balance at two different investment providers who happened to use the same bank for their client money account. If you look up Barclays, it doesn't mention the fact that Hargreaves Lansdown and others will park cash there that would be considered part of the Barclays limit (ditto for HL's active savings account).

If that's true - then several smaller providers use Barclays as their clearing bank, but they all clearly offer the full £85k FSCS protection in their terms - none of the ones I know of tell you that your protection is shared over a number of organisations that use the same bank - if that bank goes under. 

For example; Ford Money:  "It protects up to £85,000 (or £85,000 each, for joint account holders) of the money in your Ford Money accounts."

First Save:  "Your eligible deposits with FirstSave are protected up to a total of £85,000 by the Financial Services Compensation Scheme"

Charter:  "Your eligible deposits held by a UK establishment of Charter Savings Bank are protected up to a total of £85,000 by the Financial Services Compensation Scheme, the UK’s deposit protection scheme."

The three you have quoted all hold a banking license:

Ford Money https://register.fca.org.uk/s/firm?id=001b000000MfJwuAAF

First Save https://register.fca.org.uk/s/firm?id=001b000000MfMNsAAN

Charter https://register.fca.org.uk/s/firm?id=001b000000NMRUpAAP

They are therefore allowed to hold or control client money and are FSCS Registered in their own right. Where they hold the money isn't relevant for your protection because you're protected by their own FSCS registration, not the FSCS registration of the organisation where your money actually resides. If Barclays went bust, you'd claim under the three individual protections.

There's no doubt that the moment money is applied to your savings account it has FSCS protection afforded from the saving institution's licence, but the point at which the savings institution takes on liability for incoming payments in particular is unclear. Both savings and investment firms have permission to hold or control client money and are FSCS registered. When client money is held in a pooled nominee account, then the entity subject to a FSCS claim would be dependent on who failed. My understanding is that in the interests of preventing further damage to critical parts of the financial services industry, it is the entity which has already failed.

So, for example, if Barclays failed during the processing of your inward deposit, such that Ford Money etc didn't receive it, then you would claim from Barclays and Ford Money would be in for some difficult times implementing a disaster recovery plan, but wouldn't immediately be pushed into insolvency too just from the wave of customers whose deposits are lost on their journey through the Barclays nominee account.

I'd be very interested indeed in any official source that dealt with this rather specific scenario.

For example; Ford Money:  "It protects up to £85,000 (or £85,000 each, for joint account holders) of the money in your Ford Money accounts."

First Save:  "Your eligible deposits with FirstSave are protected up to a total of £85,000 by the Financial Services Compensation Scheme"

Charter:  "Your eligible deposits held by a UK establishment of Charter Savings Bank are protected up to a total of £85,000 by the Financial Services Compensation Scheme, the UK’s deposit protection scheme."

Pulling these quotes out of the prior post, they all state very specifically that eligible deposits with/held by... or money in your...accounts are protected, so those statements are fine whether or not money that hasn't yet been credited to your accounts is subject to different protection. While in a Barclays holding account, they are not yet held by [savings bank] or in your [savings bank] account.

I had Presumed that we we're talking about deposits and withdrawals in transit, not balances already parked in your savings account - I did notice their very specific wordings about 'eligible' and 'in your account'.  So it's only amounts in transit that might potentially fall through cracks or end up in a precarious situation.  Maybe then it's another argument for moving funds in more manageable amounts.  Although, as you say, it seems a very specific scenario and maybe other factors of the banking world are more likely to be problematic than this particular one.  

The Special Administration Regime was formulated to address precisely these sorts of issues, ensuring that payment and clearing systems continue functioning when a relevant firm fails. So I think we are probably well down in the hypothetical weeds when considering this issue.

Hattie627

I don't hold huge amounts in easy/instant access accounts, usually just money awaiting deposit in other places like RS accounts. However it would still be painful if my Chip funds got caught up in the hypothetical weeds being discussed. Why take the risk for minimal benefit? I've moved my Chip funds out to a new Skipton Bonus Saver (4.45%) and to an existing Newcastle BS EA Tracker (4.30% NLA). Minimal interest decrease. I've left a small balance in Chip to make it easier if I decide to return. Hopefully Skipton will have an Issue 3 Members' Regular Saver which I might qualify for in a few months, who knows. 

If Chip raise their rate next week, I will probably be tempted back 

masonic

Hattie627 said:

I don't hold huge amounts in easy/instant access accounts, usually just money awaiting deposit in other places like RS accounts. However it would still be painful if my Chip funds got caught up in the hypothetical weeds being discussed. Why take the risk for minimal benefit? I've moved my Chip funds out to a new Skipton Bonus Saver (4.45%) and to an existing Newcastle BS EA Tracker (4.30% NLA). Minimal interest decrease. I've left a small balance in Chip to make it easier if I decide to return. Hopefully Skipton will have an Issue 3 Members' Regular Saver which I might qualify for in a few months, who knows. 

If Chip raise their rate next week, I will probably be tempted back 

Skipton uses Barclays for their banking services, so is another example of the type of savings provider we were talking about. I suppose the more you move your money around, the more you'd be tempting fate, but it's not something I lose any sleep over.

soulsaver

@Hattie627
You can check your  FSCS cover here: Bank & savings protection checker | Check your money is protected | FSCS

Skipton is covered. 

cadguy77

Yellowman said:

SJMALBA said:

Very limited EA:

Chorley Building SocietyEasy Access Saver (1 Withdrawal) - 4.65%

https://www.chorleybs.co.uk/saving/easy-access-saver-1-withdrawals/

What would be the (hypothetical) gross monthly rate on this annual interest payment account?

4.55% gross monthly I think 

PixelPound

Hattie627 said:

I don't hold huge amounts in easy/instant access accounts, usually just money awaiting deposit in other places like RS accounts. However it would still be painful if my Chip funds got caught up in the hypothetical weeds being discussed. Why take the risk for minimal benefit? I've moved my Chip funds out to a new Skipton Bonus Saver (4.45%) and to an existing Newcastle BS EA Tracker (4.30% NLA). Minimal interest decrease. I've left a small balance in Chip to make it easier if I decide to return. Hopefully Skipton will have an Issue 3 Members' Regular Saver which I might qualify for in a few months, who knows. 

If Chip raise their rate next week, I will probably be tempted back 

Sure the talk about Chip on here needs to be put in perspective. If your total savings across accounts is under £85,000 then really most of the talk is moot.

Chip are not a bank, and not themselves covered by FSCS, hence why the website says money at risk, but surely the money is covered by Clearbank if deposited. The only concern is if the total in clearbank across your savings is over £85K or the money you are currently depositing/transferring gets caught up if it went under.

Unless I am wrong?

pecunianonolet

Could we not just agree that if a bank goes under, may it be Clearbank, the whole banking industry would have a much bigger problem and we all would have much more to worry about in general. 

masonic

nic_c said:

Hattie627 said:

I don't hold huge amounts in easy/instant access accounts, usually just money awaiting deposit in other places like RS accounts. However it would still be painful if my Chip funds got caught up in the hypothetical weeds being discussed. Why take the risk for minimal benefit? I've moved my Chip funds out to a new Skipton Bonus Saver (4.45%) and to an existing Newcastle BS EA Tracker (4.30% NLA). Minimal interest decrease. I've left a small balance in Chip to make it easier if I decide to return. Hopefully Skipton will have an Issue 3 Members' Regular Saver which I might qualify for in a few months, who knows. 

If Chip raise their rate next week, I will probably be tempted back 

Sure the talk about Chip on here needs to be put in perspective. If your total savings across accounts is under £85,000 then really most of the talk is moot.

Chip are not a bank, and not themselves covered by FSCS, hence why the website says money at risk, but surely the money is covered by Clearbank if deposited. The only concern is if the total in clearbank across your savings is over £85K or the money you are currently depositing/transferring gets caught up if it went under.

Unless I am wrong?

Money at rest in your savings account is covered by the underlying provider of the savings account. Money in transit will be subject to the coverage available from the entity holding it at that moment in time. This may be your linked bank, the savings provider, a clearing bank used by the savings provider, or a third party payment service provider (in the case of debit card payments). Debit card payments appear to be the weakest link in this regard, but all money in flight at the time of a failure has the potential to cause a headache for the owner. None of this is specific to Chip, although Chip differs from most other providers in that it uses a different regulated firm to provide its banking services.

friolento

Chip savings, except those deposited by card, are in principle no different to savings via Raisin, Monzo or HL Active Savings. Any money deposited into Chip by OB or Faster Payment goes into Clearbank in seconds and is then FSCS protected, up to £85k total deposits across all your Clearbank accounts.

If you deposit by card, directly or via ApplePay or Google Wallet, your money goes into pending status and takes 3 working days to clear. Whilst it is pending, you have no FSCS protection on it, and you also don’t get interest on it.

Bottom line is therefore that your Chip deposits by OB or FP are as safe as your deposits into other savings accounts with FSCS protection. We simply have to watch we don’t exceed the FSCS limit - again, that’s the same for all savings accounts.

It would help if Chip did make this clearer on their website.

janusd

crumpet_man said:

Easy access = no notice?

Instant access = no notice and no withdrawal restrictions?

FWIW, in my circumstances, i'd probably describe them as...

Easy Access = can make withdrawal and receive money today or tomorrow - number of withdrawals per account is irrelevant as long as you are fully aware of those limits when opening.

Instant Access = withdrawals arrive within an hour (being generous - usually quicker) 24/7.