FSCS Protection

[Deleted User]

This site and others is recommending Smart Save for fixed deposits. I note that Smart Save only offers a single account per person with a £85K deposit limit. Does this indicate financial prudence on the part of Smart Save, or a Bank which has little confidence that it will still be in business next week?

I appreciate that all deposits would be 100% protected but it could take some time to get one's money back, and I doubt that the FSCS Protection scheme covers interest from the date that an organisation folds until the money is repaid. Thoughts?

masonic

The FSCS does cover accrued interest, so someone with £85k in total deposits who is between interest payments has money at risk that would not be at risk if the balance was lower. Interest continues to accrue on an unpaid balance after a firm fails, including to the end of any contractual fixed term (although an option to break the fix penalty free has historically been offered). It may help to think of the scheme as compensation for any money the firm is contractually obliged to pay you up to the compensation limit.

I don't think Smart Save is signifying by its £85k limit that it has little confidence in remaining in business. It wouldn't make any difference to the bank whether or not customers lost money if it failed. It doesn't have to worry about its future reputation at that point.

25_Years_On

[Deleted User] said:

I appreciate that all deposits would be 100% protected but it could take some time to get one's money back,

FSCS aim to pay within seven days.

Albermarle

Probably in case of problems, a small player like this would be taken over/absorbed into a bigger player , with a bit of arm twisting from the B of E.

Bigwheels1111

At 6% you should only have £80k in max. 

To allow for interest.

Raisin accounts only take a max of 85k.
Its getting more common these days.

Barkin

[Deleted User] said:

This site and others is recommending Smart Save for fixed deposits.

Not really. 

It's simply placed at the top of a list, based on the interest rate paid.

phillw

Dolor said:
This site and others is recommending Smart Save for fixed deposits. 

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