FSCS query

financequestions

Hello everyone, 

I was wondering if a bank decides to come out of the FSCS scheme, 1) can they once they have joined, 2) will I be notified? 

I am just scared to go banking with a relatively new bank with no physical branches that is in the FSCS scheme currently but is not a household name and maybe I thought may leave or get kicked out of the scheme? 

Many thanks!

jaypers

Never known that to happen. Which bank are you looking at? Also suggest that be part of the scheme in the first place would involve the institution meeting some pretty stringent criteria. 

GeoffTF

The FSCS applies to all authorised banks and building societies:

https://www.fscs.org.uk/industry-resources/deposit-protection-banks/

You need to check with the FSCS Register that a firm is authorised. They cannot just decide to leave the FSCS and stop paying the FSCS levy. You are protected up to the compensation limit if they break the rules.

masonic

As above, the only way they can leave the scheme is to repay all savers and exit the market.

dunstonh

I was wondering if a bank decides to come out of the FSCS scheme, 1) can they once they have joined, 2) will I be notified? 

FSCS protection and FCA regulation of deposit takers go hand in hand.  The only way for bank to pull out of the FSCS is to give up their regulatory permissions to be a bank and return all money to account holders.

financequestions

Thank you so much everyone for your helpful replies!

I was looking at Tandem, Atom and Monument. I am somewhat old-fashioned and find the idea of a digital bank a bit scary as no branch to go to in an emergency but I think the idea is that I should move with the times probably, no? I am just very scared to move all my savings from a household name to a newcomer due to a high interest they offer. 

Thank you once again everyone! 

Albermarle

financequestions said:

Thank you so much everyone for your helpful replies!

I was looking at Tandem, Atom and Monument. I am somewhat old-fashioned and find the idea of a digital bank a bit scary as no branch to go to in an emergency but I think the idea is that I should move with the times probably, no? I am just very scared to move all my savings from a household name to a newcomer due to a high interest they offer. 

Thank you once again everyone! 

It is probably more important for savings accounts that you shop around outside the big banks. They have been paying mainly very poor rates on their savings accounts for years and there are a plethora of better alternatives. Some even with some branches ( building societies).

Also remember with current accounts, even with the big established players, they all have internet banking and apps for your phone and you hardly ever need to go to a branch anyway. ( although It can be occasionally useful for some non mainstream issues)

refluxer

financequestions said:

I was looking at Tandem, Atom and Monument. I am somewhat old-fashioned and find the idea of a digital bank a bit scary as no branch to go to in an emergency but I think the idea is that I should move with the times probably, no? 

I totally get where you're coming from but the move towards internet-only banking is slowly becoming inevitable so starting to get accustomed to it now would definitely be a good move. Lloyds, HSBC and Barclays have all closed branches in my town (plus neighbouring towns) in recent years, which shows there's no guarantee that the local branch you've used for years will still be there - even in the near-future.

My advice would be to take it slowly - if you don't currently have online banking set up with the bank or building society you use for your main current account, then set that up and get used to that first before expanding that to savings accounts with the banks you mentioned. There will be many, many forumites here who can provide feedback about any of the banks that feature in the top tables, so don't be afraid to ask if you want reassurance.

boingy

Last time I went into a "big name" branch I found that it was little more than a shopfront for their products. There was a manager but they had absolutely no power to help with my problem and just gave me a phone number to ring. I guess it's an inevitable result of "progress". I think we'll ultimately end up with just one banking hub in most towns, which may or may not be the Post Office.

I suspect the only place you will find the traditional in-person banking service is with small regional building societies.