Spreading business reserve funds across multiple accounts

[thunderlizard]

Well...in my situation COMP 4.2.3 R doesn't apply because that's about insurance policies and we're talking about bank accounts. So if my company isn't one of the COMP 4.2.2 R exclusions, it's eligible for the compensation.

"Firms(other than...a small business)" are excluded under COMP 4.2.2 R. Hence a "small business" is eligible.

Their definition of a "small business" is "a partnership, body corporate, unincorporated association or mutual association with an annual turnover of less than £1 million (or its equivalent in any other currency at the relevant time)." That fits my company. Hence it's a small business; hence it's eligible. Crystal clear

I think we'll have to wait until the first bank goes pop to see if I'm right!

[GWilliy]

err... not that we don't believe you thunder but.....

- I must be thick !!!

Contents of link quoted here

COMP 4.2 Who is eligible to benefit from the protection provided by the FSCS?
COMP 4.2.1 Unless COMP 4.2.3 R applies, an eligible claimant is any person who at any material time:
(1) did not come within COMP 4.2.2 R; or

(2)did come within COMP 4.2.2 R, but satisfied the relevant exception in COMP 4.3 or COMP 4.41.

COMP 4.2.2 Table COMP 4.2.2R Persons not eligible to claim unless COMP 4.3 applies (see COMP 4.2.1R)

This table belongs to COMP 4.2.1R

(1) Firms (other than a sole trader firm;2 a credit union;2 a trustee of a stakeholder pension scheme (which is not an occupational pension scheme)3 or personal pension scheme; a firm carrying on the regulated activity of operating, or winding up, a stakeholder pension scheme (which is not an occupational pension scheme) or personal pension scheme;2 or a small business; in each case,2whose claim arises out of a regulated activity for which they do not have a permission)

and your OP

I thought that £35,000 guarantee was for individuals, not companies. And basically it is .......

could have been a tad clearer.

[wizard1974uk]

Here is a list of banks that operate under the same banking licence:

http://www.fool.co.uk/news/your-mone...oofolrf0010002

[thunderlizard]

I'm not sure that this £35k protection is there for business accounts.

Is there any way to confirm this one away or another?

I gave you the link to the FSA handbook (some googling that took I can tell you!). Are you still sceptical?

[scooterscot]

I'm really surprised people are considering this - is the fear that real?

I've been out of the country the past few days out in the sticks of Norway I came back to learn that Bank of Scotland is no more. I'm furious such a thing was allowed to happen. But that's not the topic here of course, however, I'm thinking if such and old institution is allowed to go the way of the dodo in a few hours how safe is our money no matter where we put it? How do you tell who's safe? As of the beginning of this week I'd of thought putting my cash in HBOS was no issue giving the statements they were making to the press. Regarding HBOS I feel someone should be made accountable, you know the chief is walking away with £2m after signing with Lloyds?

'Trust no-one agent mulder' - he may have had a point...

[Billy Pilgrim]

There is a reply to a similar question over on Shout99 if interested.

[cojak]

I'm not sure that this £35k protection is there for business accounts.

Is there any way to confirm this one away or another?

[thunderlizard]

eligible

Well that was difficult to find out:

I thought that £35,000 guarantee was for individuals, not companies. And basically it is - but from the horse's mouth: incorporated companies with a turnover of less than £1m/y are eligible. That covers my firm, so nerr.

[pmeswani]

This might be stating the obvious, however, you are checking that each of your accounts is actually held within a different banking group?

RBS & NatWest are an exception to the rule, I believe... based on what I heard on BBC Brekkie yesterday, as they have separate banking license. HBOS (prior to the Lloyds merger / buy-out / call it whatever you want) has 1 banking license. So if you have £35k in Halifax and £35k in BoS, then you will only be protected on one of the £35k and not both. This may affect anyone who will have £35k in Lloyds as well... when they merge (or whatever you want to call it). Other combinations may exist, but have not mentioned here.

[wizard1974uk]

This might be stating the obvious, however, you are checking that each of your accounts is actually held within a different banking group?

[Hex]

NorthernRock is now effectively a state bank so you should be OK putting more than 35K in there.

[birdy-numnum]

I've decided to spread my business reserve funds across multiple accounts in different banks. The reason is to ensure I keep below the £35k compensation limit with each bank. You just never know...

Currently with Abbey. So I'll keep £35k in there.

Considering opening an Business Reserve with Northern Rock. It currently pays just over 5%.

I can put it on 30 day notice if the rate makes it worthwhile.

Anyone care to recommend others?