What happens if a bank goes bust?

Stock isn't necessarilly the best way to decide which to avoid. Lehman Brothers would have looked pretty safe a few days ago by that measure.

In mentioning BCCI you're neglecting that they collapsed in 1991, when the FSCS was not in effect. The whole process would be very different today.

The truth is, no one really knows because it hasn't happened, no one's had to claim from the FSA as far as I know.

The government wouldn't let it happen anyway, the financial implications would be huge.

formulaonefan wrote: »

1. How long will it take to get our money back if a bank goes bust?
2. Who do we contact to get our money back?
3. What evidence do we need to provide to get our money back? for example: kaupthing edge savings is online based company. If they go bust I'm sure their website will not be accessible, then how do we prove how much we had etc? Do you guys take printout of your balance? Do you guys have print-out of account number etc?

(4) How have you prepared for the worst?

1) No-one knows, because it's never been tested, but the assumption is it could be around 6 months - yes, frustrating and stressful indeed.

2) The banks (I assume) would advise that but (I would assume) you would hear full details in the press/news/FSA website; in any case, it would be somewhere within the FSA/FSCS

3) You should have your account number in an introductory letter. In any case, it would be sensible to record that or print out the basic account page. As to proving the amount, if the bank went bust it wouldn't be to its benefit to disguise the figures - it has no money, so 1 billion or 10 billion makes no difference. You would have to trust their accounts, certainly, unless you could prove some other way - I record all transactions on a piece of paper, so if I say I paid £100 in on 10 Jan, then I can prove that £100 went out of my other bank to that account number on 10 Jan. Because you can only withdraw to your linked account, you will alos have evidence of what has been withdrawn.

4) Don't put all your eggs in one basket - if you have £30k, although it would be covered by one bank, if that bank failed you would lose access to 100% of your savings for about 6 months and it wouldn't earn any more interest. But if you put £10k in 3 banks, you should hope to retain access to 66% of your funds in interest-generating accounts. I also wouldn't put all my money into one economy, so Icesave and KE wouldn't get 50% each either.

But if one did go bust check out what happened to BCCI which was closed down in 1991.

I'm not sure 17 year old history would be relevant; protection has hopefully improved in that time.

This has been covered over and over again on these boards and simple search will bring up the discussion threads.

AFAIK no personal depositor has technically lost any money in a UK bank for 100 odd years.

I doubt it'll ever happen, the government has set a precedent by wading into the NR situation. Barings and BCCI can't be compared in the same discussion - as I said searching the forum will explain why.

I have absolutely no concerns about this issue, the risk is minuscule IMO despite the financial climate. Far more chance of getting hit by a bus!