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Bank Account Limits - How Much Money is Safe?

The first £85,000 in your bank account is safe if your bank was to collapse

Bank account insurance (or deposit insurance) is a preventative measure employed to protect people in full or in part from any loss arising by a banks financial collapse.

Basically, this is how much of your money is safe should a bank or financial institution collapse.

In order to protect the investment of its clients, government and non-government run institutions maintain insurance schemes backed up by either the Bank of England or private entities to provide comfort to the public that their individual savings are not at risk.

Since the 1st December 2001, the FSCS (Financial Services Compensation Scheme) has been operational, to provide insurance for any bank that became insolvent in the UK.

How much of my money is safe?

Compensation limits are set for deposits, investments and for home finance such as mortgages, as follows:

  • Deposits: £85,000 per person per firm (for claims against firms declared in default from 31st December 2010)
  • Investments:  £50,000 per person per firm (for claims against firms declared in default from 1st January 2010)
  • Home Finance (e.g. Mortgage): £50,000 per person per firm (for claims against firms declared in default from 1st January 2010)

What if I have more than one account?

If you hold multiple bank accounts which are subsidiaries of another band (i.e., two or more with banks or investment companies under the same umbrella group) but which are indepedently authorised by the FSA, the FSCS would pay compensations up to the limit of £85,000 per person, per authorised institution.

If the banks with which you hold accounts are not separately authorised, but are covered by the parent companies authorisation the FSCS would pay compensation up to the £85,000 limit ONCE, irrespective of the number of accounts held.

How to find out if you’re covered?

Only banks and companies authorised by the FSA are covered by the Financial Services Compensation Scheme.