Birmingham Midshires - a good choice?

IanGC_2

I'm considering opening up a BM account, but I'm concered about the amount I'd want to stash there (over 100k). As BM are one of the largest buy to let mortgage lenders, surely they will be the hardest hit if house prices drop?

I understand that this is why they are offering such a good rate, but I'm interested in any thoughts on how good they will be in the longer term?

As you may have guessed, I'm taking a very cautious view I'd be interested to know if anyone knows of a bank less exposed to the credit crunch and yet still offers a competitive savings (or even bond) rate that I can manage online. I'm with Smile at the moment, and their savings rate is pretty poor (4.5% IIRC). I basically want to inflation proof my savings

Baldur

IanGC wrote: »

I'm concered about the amount I'd want to stash there (over 100k). As BM are one of the largest buy to let mortgage lenders, surely they will be the hardest hit if house prices drop?

As you may have guessed, I'm taking a very cautious view

Hardly 'very cautious' if you are considering placing more than £35k with any single institution (and don't forget that BM are jointly registered with the FSA alongside other parts of the HBOS Group: Halifax, Bank of Scotland, SAGA, The AA & Intelligent Finance) - see HERE.

Mikeyorks

IanGC wrote: »

I basically want to inflation proof my savings

You've posted before that you're a higher rate taxpayer ..... so you're not going to inflation proof in a savings account? Say 6.8% after 40% tax = just over 4% ..... which is lower than RPI.

What happened to the investments you were intending in July 07? Better way to hedge if you're higher rate?

IanGC_2

Just as I was about to invest in funds the whole credit crunch started, so I bottled it and held back.

If you have any better suggestions on how to inflation proof the savings I'd be extremely grateful 4% after tax was the best savings/bond account that I could find (apart from a small amount in NS&I).

rich68

I had trouble getting Birmingham Midshires to transfer my ISA to another bank. Once it had gone wrong they were useless at putting things right. They did sort it out eventually but it took several months.

About the rates and avoiding inflation, I think the only decent solution is to put some of the money into equities, maybe 10-20% into a cautiously managed fund. Although the short term future doesn't look too bright you may find that things are on the up again before you have chance to invest later down the line.

tightasabulls

Hopefully you have read the savings article on this site a few times. Follow that advice closely.

A useful account for you would be www.kaupthing-edge.com.uk

I get 5.05% after tax with them on my large savings.

I opened the account with them recently and it was very fast and efficient, i was very impressed.

But never put more than 30k in any bank if you want to be ultra safe, so this one could be one of the three which you will need.

chesky369

"I'm taking a very cautious view"

I don't think so; I make a point of never saving more than £33k-ish in any one account. At the moment it's pretty easy finding accounts with not too bad rates - any of the Iceland banks are OK, with a range of 6-month or one year savers, as well as the normal instant access. But none of these are inflation proof in the long run - you need investment rather than saving for that.

IanGC_2

Yes, I suppose that doesn't sound like I'm being cautious - but I'd have to split the amount over so many banks to keep it under the 35k limit (the amount is over 100k). At the moment I've gone for what I hoped was a "safe" bank, the co-op (smile.co.uk). If they still did the 6.2% bond offer they had on last month I'd jump at it, but I just missed it.

notis7

I dont understand why you are so worried. BM is part of the Halifax ( HBOS PLC). Do you honestly think the government would allow the nations biggest savings provider to just collapse? Quite simply the answer is no!

Welcome_2

I just stuck £13800 in this place.. 6.81 not a bad deal!

something_girl

Welcome wrote: »

I just stuck £13800 in this place.. 6.81 not a bad deal!

ah, but have you actually managed to access your account yet?

I bloody well haven't :mad: