Northern Rock,new account.

info_addict

Thanks - couldn't find the wood for the trees!!

going2die_rich

ANGLICANPAT wrote: »

Yes Beate, Im just trying to say if there could be a risk that ONLY your capital is covered, maybe its better to grab the interest at the earliest time you can in case Rock goes down. (Yes into another acc or whatever)

Wont the interest in your account count as a deposit on the date it's paid (even though it's from NR)? Therefore be protected under the £35k limit (pressuming you haven't been stupid enough to go over this amount)?

After all, if interest thats PAID isn't covered, then you could go back years saying that was never counted as a deposit, so it's not covered. For that reason, I believe interest thats deposited is covered from that the day it's paid.

The only way you wouldn't get the interest is if the bank went under before the pay date of the interest, whereby it was not deposited, so wasn't protected.

Steve_xx

going2die_rich wrote: »

The only way you wouldn't get the interest is if the bank went under before the pay date of the interest, whereby it was not deposited, so wasn't protected.

The fact that the interest may not be deposited in the account does not mean that it is not due and owed. I reckon that protection will be afforded to the full amount in the account, plus any accrued interest until the day before a bank went into administration. This opens up another can of worms. If a bank did go into administration it may take many months for depositors to get their cash back. In the interim period will the FSA continue to pay interest on those deposits, and if they did, I wonder what rate it would be at?

ABN

The Treasury said in a statement: "This guarantee covers future interest payments, movements of funds between existing accounts, and new deposits into existing accounts. The guarantee will also cover accounts re-opened in the future by those who closed them between Thursday 13 September and Wednesday 19 September, inclusive."
It added that it would be "unfair on other banks and building societies" if the protection were extended to any new customers in the future. Without Monday's government guarantee, only the first £2,000 of savings would be completely protected, with 90% of the next £33,000 covered, and nothing above that.

http://www.guardian.co.uk/business/2007/sep/20/northernrock

Thus unless things have changed would be carefull about steve_xx's advice that this bond will carry a 100% guarantee.

BenL

Things have moved on since that article in September.

Martins article -"Are my savings safe"

First, if you save with Northern Rock. After the run on the bank in September 2007, the Government stepped in to give a 100% guarantee on all ‘existing savings’ there. On 9 October, this was extended to new deposits too.

In practice, this means anyone saving with Northern Rock, whether from before the crisis, since it, or even if you took your money out and now re-deposit it, will get back your whole balance, plus interest that you’re owed and any money that you subsequently deposit there in the future. The Treasury said the guarantee “will remain in place during the current instability in the financial markets”.

Steve_xx

ABN wrote: »

http://www.guardian.co.uk/business/2007/sep/20/northernrock

Thus unless things have changed would be carefull about steve_xx's advice that this bond will carry a 100% guarantee.

104/07
9 October 2007
Northern Rock plc deposits

HM Treasury, on behalf of the Tripartite Authorities, can today confirm that the guarantee arrangements previously announced to protect existing depositors of Northern Rock plc will be extended to all new retail deposits made after 19 September, including those made from today. These arrangements will cover all retail deposits, including future interest payments, movements of funds between accounts and term deposits for the duration of their term.
These arrangements will be complemented by additional facilities through the Bank of England.
The arrangements and revised facilities have been put in place at the request of Northern Rock plc. They will allow the Company to continue to pursue the full range of its strategic options.
Northern Rock plc will pay an appropriate fee for the extension of the arrangements, which is designed to ensure it does not receive a commercial advantage. As previously announced, the arrangements to protect depositors of Northern Rock plc will remain in place during the current instability in the financial markets.

buildrum

I have now found this below quote on the NR site which changes things a little.If they are saying that 3 months notice will be given before the removal of the guarentee from the Treasury ,then this should be ample time to remove any funds you want to above the £35k saftey zone.


"These guarantee arrangements continue to remain in place during the current instability in the financial markets. Reasonable notice, which will not be less than 3 months, will be given by HM Treasury of any termination of these arrangements."

http://companyinfo.northernrock.co.uk/corporateRelations/news/article.asp?newsID=149

Beate

OH! I remember the girl in the branch saying something similar to me! I asked her whether my fixed bond could be changed in any way by Branson or whoever might buy up Northern Rock and she said, they would have to give 3 months' notice in writing before they could change anything to the bond.

bristolleedsfan

buildrum wrote: »

I have now found this below quote on the NR site which changes things a little.If they are saying that 3 months notice will be given before the removal of the guarentee from the Treasury ,then this should be ample time to remove any funds you want to above the £35k saftey zone.


"These guarantee arrangements continue to remain in place during the current instability in the financial markets. Reasonable notice, which will not be less than 3 months, will be given by HM Treasury of any termination of these arrangements."

http://companyinfo.northernrock.co.uk/corporateRelations/news/article.asp?newsID=149

Absolutely correct. :T

Wolf_Man

Now that is significant information. Seems like there is really no good reason not to load this one up.