Safe to leave large sum of money in bank account?
Discussion
Hi. Partner has recently had a financial settlement. Currently has 350k sat in her bank account.
I've never dealt with such sums in my life, is she protected against it being lost if say the banks collapsed due to recession etc? I've seen mention of you're covered up to 60k? So should we open multiple account and split it between them?
I've never dealt with such sums in my life, is she protected against it being lost if say the banks collapsed due to recession etc? I've seen mention of you're covered up to 60k? So should we open multiple account and split it between them?
According to NS&I...
"Most banks only guarantee your savings up to £85,000. We’re the only provider that secures 100% of your savings, however much you invest."
So this might be the way to go if you want to avoid the aministrative burden of setting up multiple accounts as a means of quickly getting it all covered.
"Most banks only guarantee your savings up to £85,000. We’re the only provider that secures 100% of your savings, however much you invest."
So this might be the way to go if you want to avoid the aministrative burden of setting up multiple accounts as a means of quickly getting it all covered.
You also get temporary cover of about a million (from memory) for certain things , if the criteria are met.
Check the FSCS website for details
Edit - here you go
https://www.fscs.org.uk/making-a-claim/claims-proc...
So, assuming you qualify, there would be not immediate threat to your money in the event of a bank failure if you had all your money in one account.
At least, that’s the way I read it - but IANAFA so do your own due dil
Check the FSCS website for details
Edit - here you go
https://www.fscs.org.uk/making-a-claim/claims-proc...
So, assuming you qualify, there would be not immediate threat to your money in the event of a bank failure if you had all your money in one account.
At least, that’s the way I read it - but IANAFA so do your own due dil
Edited by Pincher on Tuesday 9th September 15:06
There's also cash aggregators (like Flagstone etc.) who will do the admin side for you to spread around different banks - there are threads on here about that sort of thing, I have not used them. Bit of an additional risk if the third party co. goes bust I guess, plus there's a cost involved but I think it comes out of interest.
So yeah probably multiple banks yourself if you have them ready to go, or if they're easy to set up, or NS&I though its very slightly more of a faff getting money in and out of it if you need quick access.
So yeah probably multiple banks yourself if you have them ready to go, or if they're easy to set up, or NS&I though its very slightly more of a faff getting money in and out of it if you need quick access.
The above is correct, FSCS limit is £85k per person per financial institution (so double the amount if it's a joint account). Have a read here, temporary balances for certain things are also covered:
https://www.fscs.org.uk/what-we-cover/
As for splitting it, yes, you can, if you believe there's a chance that the organisation you have your funds with could collapse.
Probably worth getting some actual financial advice on it.
https://www.fscs.org.uk/what-we-cover/
As for splitting it, yes, you can, if you believe there's a chance that the organisation you have your funds with could collapse.
Probably worth getting some actual financial advice on it.
JagYouAre said:
Protected up to £85k in one institution (note that e.g. Lloyds and Halifax is one institution) so spread it round as much as you can up to that limit. Make sure the banks you use are covered by the FSCS, which should cover any proper UK bank.
Or £170k is protected in a joint account......if she trusts you..... 
If spreading the money around, beware of banks that are linked (eg Lloyds, Halifax, and Bank of Scotland) as the are classed as one Bank for FSCS purposes so if you had £85K in Lloyds and £85K in Halifax.....if Lloyds Banking Group went belly up you would get 85K not £170k. Well worth knowing!
Cheers
Cheers
£85k solo / £170k joint currently per institution although iirc there is talk of both these limits being increased later this year.
Temporarily balances as already mentioned are covered up to 6 months max up to £1m.
NSI 100% ok for what you have and can include putting into different types of account with them.
Temporarily balances as already mentioned are covered up to 6 months max up to £1m.
NSI 100% ok for what you have and can include putting into different types of account with them.
Simpo Two said:
alscar said:
Temporarily balances as already mentioned are covered up to 6 months max up to £1m.
That would seem the answer if the OP plans to do something with the money inside 6 months. Or could he simply move it to another bank after 6 months?After 6 months when the temporary balance cover expires she just needs to make sure that no one Bank has more than £85k assuming in her name or £ £170k in a joint account.
If she transfers to you above £ 85k the balance you need to do the same.
However if all of it was in NS&I then she could leave it all where it is.
That all said if the money was in ( say ) Nationwide or one of the larger similar Institutions you also have to ask yourself whether you think in reality they are really going to have an issue within the next 12 months.
If it stops any worries then the easiest thing would be just to transfer all of it now to NSI direct savings account but obviously you won’t get quite the same interest rate as perhaps you could get elsewhere.
If she transfers to you above £ 85k the balance you need to do the same.
However if all of it was in NS&I then she could leave it all where it is.
That all said if the money was in ( say ) Nationwide or one of the larger similar Institutions you also have to ask yourself whether you think in reality they are really going to have an issue within the next 12 months.
If it stops any worries then the easiest thing would be just to transfer all of it now to NSI direct savings account but obviously you won’t get quite the same interest rate as perhaps you could get elsewhere.
So no one has mentioned any risks. There is a risk. If a bank gets into difficulty they can exercise an option where your cash dissappear but they give you shares in their bank instead. I think this called a bail in. There are words around this baked into banking regs. But I am absolutely not an expert and i know people will start ripping into me as some tinfoil hat weirdo. So know this - there is a risk. There is no such thing as risk free.
Another risk - what if a big bank did go pop, do you believe the government have enough money to make everyone whole?
Another risk - what if a big bank did go pop, do you believe the government have enough money to make everyone whole?
ATM said:
Another risk - what if a big bank did go pop
Can't ever see that happening unless Putin presses the Big red button and then it's all immaterial. If people are so risk averse one of the big banks is going to go pop it's best they don't go out in case they get struck by lightening 
NS&I is your answer. But then again it's government backed so same argument and the risk averse will still be sweating over this dilemma. Best draw it out in cash and keep it under the mattress like Ken Dodd.
ATM said:
Another risk - what if a big bank did go pop, do you believe the government have enough money to make everyone whole?
If you check out the FSCS accounts you can see they have enough to cover the regular financial services failures in normal times, however you can also see that they don't have enough to cover even 5000 £85K balances. They do however have in their account notes on borrowing....
"FSCS is permitted to access funds from HM Treasury, through the National Loans Fund or
any other appropriate source, for a term and at an interest rate to be agreed at the time.
The amount of the borrowing facility available to FSCS is determined by HM Treasury.
As at 31 March 2025, this facility was not used. Any amounts drawn from this facility will
be replenished by means of FSCS levies on the relevant class and recoveries in
subsequent years."
So a clause where the treasury can step in in a major event, which means more national debt to sort the situation (so we are on the hook for it?) then the FSCS would over time begin to claw it back from all the registered financial institutions, which means what, they have to pass their costs on to customers, us (we begin to repay it), or they go bankrupt and we are back to the start of the flow chart!
The national debt is a harder sell now, and so may be a very tough sell then, hence the risk your nominally protected £85K ends up buying you a lot less than it did.
It's a successful semi charade, the feeling of protection is enough to keep the status quo and avoid testing the reality of the protection.
America has a similar protection of $250k but everythign was protected when SVB and Signature banks declared insolvency.
"SVB and Signature Bank were the 16th and 29th largest U.S.
banks, respectively, and a large proportion of each bank s deposits were
uninsured."
" SVB had assets of about $209 billion and about $175 billion in
total deposits at the end of fiscal year 2022"
"Signature
Bank also conducted a significant amount of business with the digital
assets industry. As of the end of fiscal year 2022, the bank had about
$110 billion in total assets and about $89 billion in total deposits"
That's billions in deposits!
Interestign reading (if you like that sort of thing!!)
https://www.gao.gov/assets/gao-25-107023.pdf
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