Make sure you are protected from bank meltdown

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Respective Metro branches in west London were besieged last weekend after group media and messaging apps claimed the bank was no longer safe. Metro, which has 1.7 million fellows, may have rejected the “false rumours”, but this has highlighted the value of the Fiscal Services Compensation Scheme (FSCS). The depositor protection scheme concentrates to UK-regulated banks, including the new breed of challengers such as Metro.

Self-assurance in Metro has been knocked by falling profits, an accounting black mess and attempts to tap up investors for new funds, but the bank insists it remains “well capitalised”.

Russ Structure, investment director at AJ Bell, said queuing customers revived unpleasant thoughts of the run on Northern Rock in 2007: “While Metro has done its best to buoy up customers that their money is safe, the pictures are damaging to its standing.”

Challenger banks typically dominate the best buy savings rate suspends, as the big four high street names offer dismal rates.

At the shilly-shally of writing, the top five easy access savings accounts were offered by challengers Virgin Money, Paragon, Sainsbury’s Bank, Shawbrook Bank and RCI Bank.

Aldermore, Al Rayan, Atom Bank, Engage Savings and Tandem also feature, as does Metro with a one-year engagement paying 2 per cent.

MoneyComms.co.uk personal finance expert Andrew Hagger said pay ins with any UK-regulated bank are protected up to £85,000 per person: “This trades you peace of mind if your bank goes bust.”

This human being is doubled for joint accounts, so couples effectively get £170,000.

If you have more savings you obligation spread them between different banks to ensure your full commands are protected, Hagger added.

David Black, banking specialist at DJB Probing, said the £85,000 limit is per authorised institution. “If you have money with disparate banks make sure they aren’t all operating under the very overall licence.”

As an example, Bank of Scotland, Halifax, Intelligent Subsidize, Birmingham Midshires and St James’s Place Bank are marketed as distinct stamps but operate under Lloyds Banking Group’s licence.

Black also give the word delivers to ensure your balance is comfortably below £85,000: “That way any stimulated by you earn will also be covered.”

Some foreign-owned banks are also FSCS colleagues, including Qatari-owned Al Rayan, Bank of Cyprus and Nigeria’s FirstSave.

In spite of that, Ikano Bank is covered by the Swedish deposit insurance scheme, RCI Bank by the French and Triodos by the Dutch. These purpose cover up to €100,000, roughly £85,000, with funds reimbursed in exceptional, but some may feel it adds uncertainty.

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