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Guest Daddy Bear

To All Str's - Where Do You Put Your Money?

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Guest Daddy Bear

Like a number of STRers on here I sold up in July with no mortgage left on the property and 300K in cash. The best deposit rate and what seemd the safest at the time was Sainsburys no notice internet account giving 6.25%.

I know I should spread it around to keep it at 35K limits and have FSA protection but it seems alot of hassle to have 10 bank accounts!

Can anyone answer these qu's please ?

1. How safe is Sainsburys Bank?

2. Should I put my money in Government savong scheme - how safe is that?

3. What other Banks and Building societies are MOST at risk? Why?

4. I understand A&L, B&B and many other small BS have a similar business modle to NR has anyone any detail on this?

5. If I am thinking of putting my money into government savings at a lower IR.... then is there a possibility of a 'run' on other banks in the highstreet - Lloyds, AbbeyNational etc as others may be thinking likewise?

Thanks in advance (did not put this on savings forum as not much activity - apologies)

DB

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Guest Winnie
Like a number of STRers on here I sold up in July with no mortgage left on the property and 300K in cash. The best deposit rate and what seemd the safest at the time was Sainsburys no notice internet account giving 6.25%.

I know I should spread it around to keep it at 35K limits and have FSA protection but it seems alot of hassle to have 10 bank accounts!

Can anyone answer these qu's please ?

1. How safe is Sainsburys Bank?

2. Should I put my money in Government savong scheme - how safe is that?

3. What other Banks and Building societies are MOST at risk? Why?

4. I understand A&L, B&B and many other small BS have a similar business modle to NR has anyone any detail on this?

5. If I am thinking of putting my money into government savings at a lower IR.... then is there a possibility of a 'run' on other banks in the highstreet - Lloyds, AbbeyNational etc as others may be thinking likewise?

Thanks in advance (did not put this on savings forum as not much activity - apologies)

DB

Hi DB. I am in very similar position. I have money in Sainsbury (HBOS - slightly worried), Cahoot (Abbey, ditto), HSBC. I closed Icesave a few weeks ago, and today closed Alliance and Leicester, based on the chatter on this site.

I am glad you started this thread, as my inclination is now to consolidate my cash in one uber High Street bank - HSBC. The cumulative interest sketch is better and I cannot see them going under in the way that the other might. However the Barclays thing is concerning.

STRers have a challenge. We need to keep our money safe and earning until prices drop enough to re-enter the housing market..... Maybe 50% in HSBC, 50% in Lloyds, though their (Lloyds) int rates are shocking.

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Hi DB. I am in very similar position. I have money in Sainsbury (HBOS - slightly worried), Cahoot (Abbey, ditto), HSBC. I closed Icesave a few weeks ago, and today closed Alliance and Leicester, based on the chatter on this site.

I am glad you started this thread, as my inclination is now to consolidate my cash in one uber High Street bank - HSBC. The cumulative interest sketch is better and I cannot see them going under in the way that the other might. However the Barclays thing is concerning.

STRers have a challenge. We need to keep our money safe and earning until prices drop enough to re-enter the housing market..... Maybe 50% in HSBC, 50% in Lloyds, though their (Lloyds) int rates are shocking.

There's always National Savings. 5.15% if you have more than 50k. Lower than the 7% you can get from banks, but obviously a lot safer.

And if they go down, well an STR fund won't save you, but a shotgun, 3000 tins of baked beans and spam, and a cabin in the woods is about all there will be left as an option.

We are toying with £1800 in some of the 1 year fixes that the desperate BSs are offering, but going for monthly interest, just in case they don't count any uncredited interest in the Compensation Scheme.

Also the 2 year National Savings Index Linked certificates, linked to RPI, if you think that the inflation is a major risk. I think it is 10k max per person and not sure if it is taxable or not.

That's our current thoughts.

You can try short Gilts and Gold, but I think those are for the professionals. :)

Also, you could pay 6-12 months rent up front and get a discount, that way you transfer the risk to your LL!

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hi,im in same boat

i originally split the money into 10 accounts to keep under fsa limits (loads of hassle) but also opened a nsi saving account with £100(just as a precaution as i suspected this would happen) and am now in processs of transfering my funds to this account until all this settles , i will leave my accounts open & return the monies if & when i feel confident to do so.

you have to weigh up your own risk aversion, lower rates & safety or higher rates & maybe some risk.

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Also the 2 year National Savings Index Linked certificates, linked to RPI, if you think that the inflation is a major risk. I think it is 10k max per person and not sure if it is taxable or not.

£15K and theres a 3-year and a 5-year term issue.

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I would also add that I think because Tesco and Sainsbury are such big companies, I don't think they would let savers down as it would ruin their reputation in their core business.

Also I think that these banks a co-owned by the supermarkets and the banks, so if the bank went down, I don't tknow whether there is the usual case of "joint and several" liability, i.e. Tessies might have to cough up any leftovers.

If they had any sense they would issue that guaranntee, although in the current climate, that might cause a run on the shares, almost like a Don't Panic headline,:)

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Guest DissipatedYouthIsValuable
hi,im in same boat

i originally split the money into 10 accounts to keep under fsa limits (loads of hassle) but also opened a nsi saving account with £100(just as a precaution as i suspected this would happen) and am now in processs of transfering my funds to this account until all this settles , i will leave my accounts open & return the monies if & when i feel confident to do so.

you have to weigh up your own risk aversion, lower rates & safety or higher rates & maybe some risk.

I have converted my savings to underpants of pure gold.

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£15K and theres a 3-year and a 5-year term issue.

Sorry, you are right, and it's tax free.

It does mean holding out for a while, but that depends how long you want to wait.

30k between a couple sounds quite good.

Is anyone else worried about spending their STR fund?

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I have converted my savings to underpants of pure gold.

Do they chafe?

Talcum powder can help y'know.

There's also a whole thread on Premium Bonds, 30k limit per person, regular winnings and the chance of a big fat million.

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I have my August STR fund as follows. £6k of my STR in NS&I direct ISA (3k each me and the wife). I also have £30k in Premuim bonds (maybe a crap return I know but I am bordeline 40% tax and fancied the punt for a year or two to maybe win a biggy). I have £80k in Tescos savings @ 6.75% for 6 months (1% bonus) which is RBS / Natwest I beleive.

I read somewhere that RBS / Natwest is much less exposed to US Subprime CDO / SIV than the other big boys so much safer? Not sure how true that is but the Tescos bonus rate got me at the time. The few £k left is floating around in Natwest and A&L current accounts ready to pay a few CC bills when they appear later in the month, but the A&L account pays 6.5% up to £2.5k in credit, which it is.

As soon as 06/04/08 arrives another £6k+ will go into NS&I direct ISA. When the Tescos 6 month bonus ends I will look at the situation again and if the RPI has crept back 4.5%+ I will switch The remaining Tescos to NS&I RPI index linked as from the next tax year I will hhave a company car back on my tax and will almost certainly be in 40% savings interest tax on self cert.

M

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well all you need is to look who over the past 4 years has been selling mortgages the most and take the bank that has least sold them, and i think nat west is one of them.

Edited by crash2006

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well all you need is to look who over the past 4 years has been selling mortgages the most and take the bank that has least sold them, and i think nat west is one of them.

And they are part of?

RBS, should have looked at the other posts :)

So if you are going to invest large amounts with RBS, Tesco would be better IMO.

Edited by bobthe~

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Guest Daddy Bear

It's interesting to see the different paths followed by STR's.

Regarding the J sainsbury abank ccount (6.25%) , even though it is part owned through by HBOS and JS it is the HBOS bit that concerns me.

JS has a good reputation and is a solid business - I have a vague recollection of assets (land buildings etc £10bn + their retail business on top which must be worth another £10bn?? Anyway a £20bn solid business.

Just done a quick google search and have quoted a few articles....

"The banks have suffered a torrid few days, in which HBOS bailed out a $35 billion in-house fund"

"Christian Stracke, an analyst with CreditSights, noted in a report last week that pinning down banks’ exposure to ABCP is difficult. However, he said he believes the largest liquidity providers in the $40 billion to $50 billion range include ABN Amro, British bank HBOS and HSBC Holdings. Though the exposure could hurt earnings, it is unlikely to topple any banks, he said."

"As demand for such debt has dried up, banks are under huge pressure to step in with their balance sheets to bail the conduits out. Analysts expect peers of HBOS to follow suit. Many banks have built up conduits but HBOS's Grampian is the biggest in the world. It is thought to have had about £150m of securities backed by American subprime mortgages."

"Grampian had $35.4bn in debt outstanding as of the end of May, according to Moody's Investors Service, making it the biggest issuer of assetbacked commercial paper in Europe. German lender IKB became the sector's first casualty earlier this month when it was bailed out by State-backed Kreditanstalt f¸r Wiederaufbau."

"Most mainstream lenders have subprime arms, mainly distributing through intermediaries - for example, HBOS has BM Solutions "

"Edinburgh-based HBOS Plc, the nation's biggest mortgage lender, hasn't changed its offers lately, said spokesman Mark Hemingway."

I am sure there is alot more out there on HBOS...I do know cgano has been particularly warning of them...that worries me in itself!

The question is If HBOS got into trouble how far does the liability effect JS Sainsbury bank - are they ring fenced - does anyone know???

Thanks in advance to anyone who can shed light on this.

DB

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Any thoughts on how safe ING are? I know there are better paying accounts....but my str money is still there, would like to think it would stay there, but under the current climate????

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However, he said he believes the largest liquidity providers in the $40 billion to $50 billion range include ABN Amro, British bank HBOS and HSBC Holdings

given the current climate does anyone else think RBS would be foolish to go ahead with their bid for ABN ?

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I'm splitting mine as follows:

- £30k in Premium Bonds. You may win £1m, after all!

- £15k in NS&I Index Linked Savings Certs (3yr)

- £30k in Stroud & Swindon 7.05% Bond (matures Dec 2008)

- £40k in Alliance & Leicester Direct Saver

- £30k in Sainsburys

- various Cash ISAs gathered over the years.

- Maxi Investment ISA with iii invested in various funds including those focusing on: Europe, South America, China, Japan&Asia, Gold and commodities

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I'm 100% in HSBC but as soon as Northern Rock hike their savings rates (inevitable IMHO) I'll put £2K with them for the craic.

Also considering putting £30K with Nationwide to spread the love a bit ;)

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Hi DB. I am in very similar position. I have money in Sainsbury (HBOS - slightly worried), Cahoot (Abbey, ditto), HSBC. I closed Icesave a few weeks ago, and today closed Alliance and Leicester, based on the chatter on this site.

I am glad you started this thread, as my inclination is now to consolidate my cash in one uber High Street bank - HSBC. The cumulative interest sketch is better and I cannot see them going under in the way that the other might. However the Barclays thing is concerning.

STRers have a challenge. We need to keep our money safe and earning until prices drop enough to re-enter the housing market..... Maybe 50% in HSBC, 50% in Lloyds, though their (Lloyds) int rates are shocking.

Just to remind people that HSBC is in fact the bank which has declared the largest potential exposure to sub-prime losses of any UK bank. They have put the figure at over £5bn or half their profits, an incredible sum of money. They were one of the first banks to declare potential sub-prime losses earlier this year and most people have forgotten about this by now

Best,

L

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I know this may add to your worries but what concerns me about my STR fund is it being wiped by inflation if the BoE continues printing and pumping the market full of sterling. If they let inflation out of the bag, eventually it will be reflected in he FX rate.

I am keeping a close eye on Euro/Yen and have accounts open to transfer at a moments notice. As per RB's warnings, we may see the pound crash.

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