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Dead Spider

Fsa Deposit Guarantee

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Hi ,

I'm getting a little worried about my savings so went through some of my accounts to make sure they are covered by the untested FSA deposit guarantee .

I have a large deposit with "The AA" , and a large deposit with "Birmingham Midshires" .

The "deposit taker" for "The AA" just happens to be "Birmingham Midshires" which just happens to be a division of "Halifax PLC" .

I phoned "The AA" to see whether they thought , in the event of "Birmingham Midshires" going bust , I would be covered by 2 x £31,700 guarantees .

The girlie went away to ask a supervisor and it turns out I'd only get £31,700 back if "Birmingham Midshires" went bust .

It also looks like , if I also had money directly with "Halifax PLC" and they went bust , I'd only get the one £31,700 back even though I thought I'd been covering myself by spreading the money around 3 providers .

Can someone please tell me this is all balls and the supervisor at "The AA" has got it all wrong and I'm covered , potentially at all three "firms" .

Finding a good rate is getting a real pain .

Thanks in advance .

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Maybe it's worth writing to http://www.fscs.org.uk/ as they would have the definitive answer.

Also, I'd like to hear what the girlie thought when you asked such a non-standard question?

Hi Jason ,

Thanks .

She went to ask her supervisor and said she found the question and answer interesting .

I'll go to the FSCS as last resort . I'll see if anyone knows the answer here first .

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In lieu of someone finding a link to a web-page containing a table of information about this (it seems plausible that there'll be one out there somewhere!), then I'd be tempted to just ask the people with whom you're about to invest each time...

Presumably, it's a reasonable expectation that a representative of some firm will know with which other firms (and in what way) they are affiliated.

If you have £35k invested with both Firm A and Firm B, and you wish to invest some money with Firm C, you should be able to ask Firm C if it has any association with either Firms A and/or B?

I guess the only problem with this is that affiliations change, firms buy out other firms etc., and what we really need is a link to that hypothetical dynamic affiliations web-page! ;)

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In lieu of someone finding a link to a web-page containing a table of information about this (it seems plausible that there'll be one out there somewhere!), then I'd be tempted to just ask the people with whom you're about to invest each time...

Presumably, it's a reasonable expectation that a representative of some firm will know with which other firms (and in what way) they are affiliated.

If you have £35k invested with both Firm A and Firm B, and you wish to invest some money with Firm C, you should be able to ask Firm C if it has any association with either Firms A and/or B?

I guess the only problem with this is that affiliations change, firms buy out other firms etc., and what we really need is a link to that hypothetical dynamic affiliations web-page! ;)

I just asked the FSCS so will post the answer here if I ever get one .

I'm just very annoyed with myself for not comprehending the smallprint at the bottom of a letter from The AA stating who the deposit taker is .

Oh , for info , their rate is 5.85% for any str's out there http://www.theaa.com/savings/telephone.html .

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If an institution like Halifax went bust, it would be in an extremely harsh economic environment where other smaller deposit takers had most likely failed before it.

That being the case the FSCS guarantee would probably be worthless. It is set up to cover small companies defaulting on their liabilities and couldn't cope with mass failure like that which would be happening if the Halifax was in trouble.

Just my 2c

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If an institution like Halifax went bust, it would be in an extremely harsh economic environment where other smaller deposit takers had most likely failed before it.

That being the case the FSCS guarantee would probably be worthless. It is set up to cover small companies defaulting on their liabilities and couldn't cope with mass failure like that which would be happening if the Halifax was in trouble.

Just my 2c

I think that it's just about increasing the chances of a favourable outcome (which could be the mantra for sensible investing of any kind...)

Spreading one's money around a number of financial institutions seems like it might increase the chances of a favourable outcome should something go wrong, and is no disadvantage[1] if nothing goes wrong.

I don't think there are any certainties, and I agree that, despite our best efforts, we still might lose it all... But I think it always makes sense to try to stack the odds in one's favour where possible.

[1] Apart, perhaps, from the overhead of time and trouble to deal with more than one institution.

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