By ADRIAN LOWCOCK 28/05/2009
Yesterday the Spanish banking giant, Santander, announced that they were merging their three banking groups Abbey, Bradford & Bingley and Alliance & Leicester and rebranding them under the parent name of Santander.
Whilst the rebranding will not happen overnight it does bring to the fore the issue of deposit protection. Although no UK savers have lost their deposits in the credit crisis, many investors want to ensure their deposits are well protected.
The rules
If a bank or building society, authorised to take deposits by the FSA, is unable to pay them back, the Financial Services Compensation Scheme (FSCS) will pay 100% of the first £50,000 of an eligible claim, per institution. This protection covers private individuals and some small firms.
However, it is possible for an individual to have two separate accounts with different banks but only have one level of cover. Deposit firms apply for and are issued with a Firm Reference Number (FRN). These can cover several banks and each banking Group might have more than one FRN. e.g. Barclays plc has two FRN codes.
In the case of joint accounts, the FSCS will treat the money as split equally with each account holder being eligible for compensation to the maximum limit of £50,000.
Which banks have linked authorisations
To find out what level of protection you have on your savings please check the FSA website here: www.moneymadeclear.fsa.gov.uk. Please note this is not a comprehensive list and if your bank or building society is not on the list we recommend you contact them to confirm the ultimate holder of your savings and level of protect you are afforded.