Northern Rock now a safe place for savings?

I took out a Silver Saver account just before the disaster last summer. (I removed a lot of it, and then put it back) I have not lost a penny (except in the three day penalty emposed by the banks for transfers), in fact I have benefitted not only from the high headline rate, but also a +0.5% bonus payable in March for those who kept their money in.

However. To answer your question, it is entirely safe at the moment. I personally expect the rate to decline gradually over the next year - but you could not get a saver place for your savings unless you are prepared to dig a very big hole under your house, and employ a security guard to watch over it for you.

John

NR is a special case of course, but the conventional wisdom, surely, would be to split it between three different banks/buldingsocs so that you benefit from the 35k guarantee of savings in each one. Does the givt's guarantee to NR savers apply to those who opened accounts after the guarantee was made?

Robert

NR is a special case of course, but the conventional wisdom, surely, would be to split it between three different banks/buldingsocs so that you benefit from the 35k guarantee of savings in each one. Does the givt's guarantee to NR savers apply to those who opened accounts after the guarantee was made?

Robert

It does, although as you suggest, I personally have put a max of 35k in each of different accounts. (Just an old fashioned suspicion of Government, I guess).

John

Do you think that is better, in some way, than the Govt's guarantee of

100% of savings held in NR? Doesnt this 100% guarantee void the need to split one's fund between various banks?

I think so, but I hope someone else will verify (to save me hunting for the relevant pice of NR/Govt small print).

JimD

Yes - I just discovered that offer, as it came to an end. Oh, well...

But then you'd have the question of what to put in the hole... (-;

JimD

Yes I do, personally. The old 35k guarantee is well defined and has some history to it; there is no doubt about what it means. The NR guarantee changed several times and the interviews given by ministers about it did not always match the acual terms In particular, the question of whether it applied to people who took their money out and then put it back again and people who opened an accoutn after the guarantee was given. Finally the EU might rule that the guarantee is void because it gives NR an unfair advantage.

These are, i agree, small risks, but since the cost of splitting it into 35k chuinks is small, I would prefer to do that.

Has the NR has incorporated the text of the guarantee into the terms and conditions of new accounts?

Robert

Perhaps someone else can answer that - I opened my account just before the shinannygins. I didn't have any funds in the account until today though.

JimD

NR is now owned by the government and backed by the government. Any FSA compensation would only come into it if the bank went broke, which it can hardly do given the backing and ownership it has and the political backlash if it were allowed to go belly up. In that sense, it seems to me to be as safe a National Savings, but with higher interest rates.

Anyone disagree?

It can't, because the guarantee is provided by someone else, not by them.

So if you open such an account with the NR where do you find the text of the guarantee you are relying on? the OP asked for a link to the actual text but i don't think anyone has provided one yet.

Robert

Try the BBC. It was reported in the news that the Govt had undertaken to guarantee all deposits with NR. Whether that guarantee still applies is not at all clear, nor is whether it ever really applied at all, or was just another hollow promise made by a bunch of politicians. They may well not have had the authority to make it.

"Norman Wells" wrote

Has it now lost it's "limited liability" that every other Limited Liability Company has? I hadn't heard that...

imo yes - since the takeover, it is as safe as the government. Generally, developed world governments are considered by the financial markets to be the safest investments.

Daytona