Savings Protection Guide

How safe are your savings?

There are two main elements to the security of your savings that is the risk of insolvency at the bank or building society where you keep your savings and whether you are eligible for protection with the Financial Services Compensation Scheme.

Insolvency  |  FSCS  | Subsidiaries  | International Banks  | Structured products

Credit ratings and capital  |  Credit rating and capital example


If the bank or building society where you save is unable to repay you your money then it would be considered insolvent. For most conventional savings accounts you would be covered in this event by the Financial Services Compensation Scheme (FSCS).

The risk of a bank or building society becoming insolvent is sometimes referred to as ‘counterparty risk’.


The FSCS deposit protection scheme is designed to provide a guarantee to savers – up to a set limit – that they can get back their money if an authorised institution (bank or building society) is unable to meet its financial commitments.

You are covered up to £85,000 per authorised institution by the FSCS in the case of accounts with banks or building societies. (The same limit applies to accounts with credit unions).

You can check with the Financial Services Authority (FSA) to find out if an institution is authorised.

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Trading names or subsidiaries of banking groups or building societies are not covered separately. For example, Birmingham Midshires is part of the Bank of Scotland so you would be covered in total up to £85,000 for any accounts you had with Bank of Scotland and any its subsidiaries (which also includes Halifax). Although Bank of Scotland is part of the Lloyds Banking Group, it is authorised as a standalone entity.

The key is to read the small print of any savings account you are considering or currently hold to see which authorised institution your money is held with, if you are concerned about exceeding your compensation limit with one institution.

Visit the FSCS website for more information about the FSCS.

International Banks

Authorised financial firms in the European Economic Area (EEA) are listed by the FSA, and are likely to have comparable deposit protection cover but may be covered by different compensation arrangements.

If bank is outside of the EEA but its British-based business is authorised by the FSA deposits with that bank may be eligible for the FSCS.

See the tables below for examples of savings accounts currently available:

Instant Access Savings Accounts Deals
ProviderAccountInterest Rate (AER)TermApply
1.30%Instant AccessMore Info >
MARKET LEADING. Earn 1.30% gross/AER. Instant Access. No notice periods. Unlimited payments and withdrawals. Pay in from £100. RCI Bank are protected up to a total of €100,000 by the FGDR, the French deposit protection scheme. Manage account online.


Instant AccessMore Info >
Earn 1.22% AER variable interest. Interest can be paid monthly or annually. Open an account singly or jointly. Minimum deposit £1. Unlimited deposits and withdrawals permitted. FSCS Protected
1.15%Easy AccessMore Info >
1.15% gross/AER. Instant Access. Free withdrawals and no notice period. Deposit from £100. Includes a fixed bonus of 0.95% gross fixed for the first 12 months. Quick and easy online application

Gross is the interest you will receive before tax is deducted.

AER stands for the Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year.

Latest Fixed Rate Bond Deals
ProviderAccountInterest Rate (AER)TermApply


per annum

£5,000Apply Now >
Earn 2.20% fixed interest - 3 year term - Minimum deposit £5,000 - No withdrawals permitted. FSCS Protected


per annum

£5,000Apply Now >
Earn 2.02% fixed interest - 2 year term - Minimum deposit £5,000 - No withdrawals permitted. FSCS Protected


per annum

£1,000Apply Now >
Earn 2.40% gross/AER fixed for 4 years. Save £1,000 - £250,000. No withdrawals during the term. Individual or joint accounts available. Annual or monthly interest. FSCS Protected

Structured products

Structured products known as structured deposits have capital protection similar to a savings account. The original capital deposited may be eligible for the FSCS savings protection. The details of a plan should state which authorised institution the deposit is held with and whether it is eligible for FSCS cover.

Capital is at risk in a structured deposit if the counterparty or deposit taker for the plan becomes insolvent.

See the table below for examples of structured deposit plans:

Growth Structured Deposits
ProviderPlan NameMaximum Potential Return*TermMore Info
FTSE 100 Kick Out Deposit Plan


per annum

Up to
6 years
More Info >
Capital protected deposit plan with the potential to mature after years 3, 4, 5 and 6. If the plan matures early it will return 6% times the number of years the plan has been in force. Also available for Cash ISA and ISA transfer.
* Maximum Growth Yields are not guaranteed and subject to certain conditions

Credit ratings and capital

Two of the key measures of how ‘safe’ an institution is, when it comes to your savings, is the overall credit rating it has and how much capital it holds. Both of these factors would be considered when looking at whether a company would be able to survive and repay savers if it is making losses and in trouble.

Independent agencies such as Standard & Poors and Moody’s provide credit ratings for banks and buildings societies. Company annual reports will show how much capital a firm holds , with this often presented as a percentage of its overall assets.

Credit rating and capital level example

For example, at May 2011 Nationwide Building Society had an A+ long-term issue credit rating from Standard & Poor’s, suggesting it has strong capacity to meet its commitments but in relative terms may be more susceptible to negative changes in circumstances and economic conditions. The highest possible rating is AAA.

In its preliminary results for the 2010/2011 financial year, the building society reported a core tier 1 capital ratio of 12.5 per cent.

Core tier 1 capital is defined as being equity (issued shares or common stock) in a company. In the case of a building society, which is a mutual organisation with members and does not have shareholders, this capital is reserves, also called retained earnings.