Are these banks safe?

luberluber
luberluber Posts: 18 Forumite
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in Budgeting & bank accounts
Hi all

I want to deposit some hard-earned business savings/profits into a bank account that gives half decent interest rates. I've found Hampshire Trust Bank, and Redwood Bank. However they are very small banks.

Are these sort of banks safe to put your hard earned cash? I worry about them going under, not getting your money back, etc. - but the usual high street names are offering appalling interest rates on savings.

Thanks!
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  • Browntoa
    Browntoa Posts: 49,298 Forumite
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    Both have FCS protection ....
    Ex forum ambassador

    Long term forum member
  • blue.peter
    blue.peter Posts: 1,203 Forumite
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    I've just tried looking up both of the banks that you named on the FCA/PRA Firancial Services Register. Both are, it seems, authorised, and covered by the Financial Services Compensation Scheme. You can check this yourself. (I can't include URLs in this post, but a Google search on "financial services register" will quickly take you to the right place.)

    Coverage by the FSCS means that you should get compensation if an authorised bank goes under, though there are limits. In particular, I don't think that business accounts are covered, though I could be wrong. It might be worth checking with the FSCS yourself. Any such limitations would also apply to deposits in big banks.


    I have had no dealings with either bank, so I can't offer any comment from personal experience.
  • eskbanker
    eskbanker Posts: 30,920 Forumite
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    blue.peter wrote: »
    Coverage by the FSCS means that you should get compensation if an authorised bank goes under, though there are limits. In particular, I don't think that business accounts are covered, though I could be wrong. It might be worth checking with the FSCS yourself. Any such limitations would also apply to deposits in big banks.
    Small businesses should be OK, see https://www.fscs.org.uk/your-claim/useful-information/small-business-charity/
  • Ballard
    Ballard Posts: 2,849 Forumite
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    I just had a glance at Hampshire Trust Bank and didn’t see particularly attractive rates. The accounts listed also describe the products as bonds and I’m not sure whether they would be covered by FSCS protection. You would probably need to get further information on them to make sure (I’m no expert on this but have a feeling that bonds aren’t covered).

    I have recently opened an account with Al Rayan Bank which seem to offer more competitive rates and the opening process was straightforward. I would suggest that you take a look at them.
    I hate verisimilitude.
  • soulsaver
    soulsaver Posts: 5,962 Forumite
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    Ballard wrote: »
    I just had a glance at Hampshire Trust Bank and didn’t see particularly attractive rates. The accounts listed also describe the products as bonds and I’m not sure whether they would be covered by FSCS protection. You would probably need to get further information on them to make sure (I’m no expert on this but have a feeling that bonds aren’t covered).

    I have recently opened an account with Al Rayan Bank which seem to offer more competitive rates and the opening process was straightforward. I would suggest that you take a look at them.
    AR 1.6% easy access is no longer available to new applicants.
    1.0% now.

    Their fixed term acs (sometimes called 'bonds') are, or at least were, competitive.
    Top Easy Access acs Ranked by rate: Top of The Pots - **No Chat** — MoneySavingExpert Forum
  • Ballard
    Ballard Posts: 2,849 Forumite
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    soulsaver wrote: »
    AR 1.6% easy access is no longer available to new applicants.
    1.0% now.

    Their fixed term acs (sometimes called 'bonds') are, or at least were, competitive.

    I didn’t realise that they’d lowered their rates so it looks as though I got in just in time.
    I hate verisimilitude.
  • snowqueen555
    snowqueen555 Posts: 1,521 Forumite
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    Browntoa wrote: »
    Both have FCS protection ....

    FSCS I hope!
  • colsten
    colsten Posts: 17,597 Forumite
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    Ballard wrote: »
    I have recently opened an account with Al Rayan Bank which seem to offer more competitive rates and the opening process was straightforward. I would suggest that you take a look at them.
    They were so popular, they had to close applications for their 1.6% account. New issue just pays 1%, so totally knocks them out of any competition.

    Also, I'm not sure they are business accounts, which is what the OP is after?
  • luberluber
    luberluber Posts: 18 Forumite
    First Anniversary
    Thanks all. I will do some further digging then. Anything with instant access business savings (or even a shortish notice period, say 30 days) is hard to find with interest rate over 1%
  • New_York_No1_fan
    New_York_No1_fan Posts: 172 Forumite
    First Anniversary Combo Breaker First Post I've been Money Tipped!
    I used the Hampshire Trust Bank for a 90 day notice account a few months ago when the rate was 1.91%.
    Great service, efficient, easy online process and no problems to pay money in or subsequently close the account.
    Would use again.
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