The golden rule is to make sure you do not keep more than £50,000 (including interest) with any one bank or building society. This will ensure your savings are kept within the depositors’ compensation scheme limits and are as safe as possible.
If your bank or building society were to fail only the first £50,000 of deposits you hold with one organisation will be covered by the compensation scheme. Make sure you do not inadvertently exceed the limits by opening accounts with banks owned by the same parent organisation. For instance, the Cheshire and Derbyshire building societies are now part of the Nationwide. If you open new accounts with all three you will only be covered for one lot of £50,000.
In the case of a joint account, the money is assumed to be split equally between you unless evidence shows otherwise. This means that each account holder in a joint account would be eligible for compensation up to the maximum limit.
If you do not like the idea of opening up to seven separate accounts to shelter the £350,000 safely you could consider one of National Savings & Investments accounts. Any money deposited with National Savings is 100% secure and is not subject to the £50,000 compensation limit. They offer two accounts: the Easy Access account which is instant access or the Investment account which is a 30-day notice account. I should warn you that the interest rates are pretty poor (but you may prefer the convenience and ease of keeping all the money in one place). SavvyWoman’s top deals, provided by Moneyfacts, include savings accounts best buys and are updated daily.
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