Northern Rock turns savers away
by Gill Montia
Story link: Northern Rock turns savers away
Northern Rock has withdrawn over half its savings products because of high demand for new accounts.
The Government’s delay in increasing the cover provided under the Financial Services Compensation Scheme for savers’ deposits is prompting consumers to seek safe-havens for their money.
The guarantee currently stands at £35,000 and remains under review but savers with nationalised Northern Rock benefit from 100% protection for their funds.
The recent turmoil in the financial sector has seen thousands of savers turn their backs on Bradford & Bingley and Halifax and transfer money to Northern Rock.
However, when the bank was nationalised in February, competition rules restricted its share of the savings market to 1.5% and applications for the following savings accounts are no longer being accepted: on-line E-Saver; Fixed Rate Access Bond; Silver Savings; Silver Savings 30; Business Reserve and Fixed Rate Bonds.
Meanwhile, the decision of the Irish Government to increase its savings guarantee to 100% has met with criticism from the UK financial services sector.
Since the announcement earlier this week, savers have been moving their deposits into the six banks covered by the guarantee and into Post Office accounts, which are backed by the Bank of Ireland.
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