Savings compensation threshold

JayEl3

Hello just some advice please on savings accounts: is it strongly advised not to keep over the compensation limit within the account/bank?  (which is 50,000 or 85,000)
Im sure its risky if the bank is potentially going bankrupt, but would there be any other reasons to be wary of going over?
I put in a little over the limit, but its an instant access account - so I assume if I had or foresee issues I could move funds fairly quickly. My intention was to keep savings "somewhere" just for a month or 2 while I open another account with another non affiliated bank, so as to remain under the threshold. Just I need to research a bit first.
could I ask is this very risky? O I presume lots of people do this.
thanks

Bigwheels1111

You are mad, Mad I say.

If you had a fixed account at 6% and 85k in the account.

That is £5100 of interest at risk.

eskbanker

JayEl3 said:

is it strongly advised not to keep over the compensation limit within the account/bank?  (which is 50,000 or 85,000)

Yes, and it's £85K.

JayEl3 said:

Im sure its risky if the bank is potentially going bankrupt, but would there be any other reasons to be wary of going over?
I put in a little over the limit, but its an instant access account - so I assume if I had or foresee issues I could move funds fairly quickly.

I don't think that's a safe assumption - if a bank was teetering on the brink of bankruptcy, it's best not to assume that it would be operating normally and that you'd definitely be able to access your funds.

JayEl3 said:

My intention was to keep savings "somewhere" just for a month or 2 while I open another account with another non affiliated bank, so as to remain under the threshold. Just I need to research a bit first.

It's very easy to open online accounts and get them funded at the drop of a hat, so no need to wait for months.

JayEl3 said:

could I ask is this very risky?

Probably not, but when it's easily avoided, why take the risk at all?

JayEl3 said:

I presume lots of people do this.

Would that be any consolation if you lost money?

wmb194

Which bank(s)? I'd worry a lot less about going over the £85k limit with HSBC than I would with Chetwood Financial aka SmartSave.

wmb194

JayEl3 said:

Hello just some advice please on savings accounts: is it strongly advised not to keep over the compensation limit within the account/bank?  (which is 50,000 or 85,000)
Im sure its risky if the bank is potentially going bankrupt, but would there be any other reasons to be wary of going over?
I put in a little over the limit, but its an instant access account - so I assume if I had or foresee issues I could move funds fairly quickly. My intention was to keep savings "somewhere" just for a month or 2 while I open another account with another non affiliated bank, so as to remain under the threshold. Just I need to research a bit first.
could I ask is this very risky? O I presume lots of people do this.
thanks

Are you still in Italy? The general principle of spreading your money around is still applicable but referring to British compensation limits is rather moot if you'd have issues opening accounts here. If you're in Britain then there is also temporary high balance protection in certain circumstances (you mention, "300k" without stating the currency).

https://forums.moneysavingexpert.com/discussion/6446073/savings-accounts-overseas-resident/p1

https://forums.moneysavingexpert.com/discussion/6451705/offshore-accounts-iom-chan-is-non-uk-resident#latest

Qyburn

It wouldn't bother me to be over the limit for a few months, maybe longer depending on the underlying reason.