How much money is covered by the Financial Services Compensation
Posted - 02/05/12
In the United Kingdom, the Financial Services Compensation Scheme
currently covers the following amount,
- £85,000 for each saver, for each financial institution
they have saved in.
Therefore, to be fully covered you cannot have more than £85,000
saved within one financial institution. If you have more than £85,000
in savings, you can be fully covered by placing £85,000 or
under, in two or more financial institutions. It should have noted
that the scheme covers a financial institution and not a bank: financial
institutions can own a number of banks; therefore, if you are investing
over £85,000 in two or more banks, ensure that those banks
are not owned by the same financial institution. If the two banks
are owned by the same financial institution, then you will be only
covered for £85,000.
You should probably place no more than than £82,000 in one
financial institution: as interest is added to the initial deposit,
it would rise above £85,000 - assuming you placed £85,000
into the account. Finally you should ensure that the financial institution
is regulated by the FSA and covered by the Financial Services Compensation
Scheme (FSCS) - not all banks operating within the UK are.