16:44 21 March 2013
With the financial crisis affecting Europe, now is the best time to ensure that your savings are 100per cent safe. Here’s how you can do that:
1. Stay within FSCS limit. Start by making sure that your bank is protected by Financial Services Authority or FSA so your savings of up to £85,000 are protected.
This means that should your provider goes bankrupt, FSA will cover £85,000 of your savings. Keep in mind that this limit is per person and not per account.
If you have more than £85,000 in your savings account right now, consider spreading your money to several financial institutions.
2. Consider a joint savings account (FSA covers £85,000 per person). If you and your partner have saved more than that amount, consider opening a joint savings account to double FSA coverage.
3. Check out the banks offshore before you open an account. A lot of people are tempted to open savings account offshore due to higher interest rate.
But keep in mind that banks from other countries are covered by their own domestic compensation scheme. Know these before you put your money offshore.
4. Say no to structured deposits. Structured deposit products are fixed term plans that will pay interest linked to a stock market.
These products are risky, as you do not know how much interest you’ll get at the end of term or if you’ll earn interest at all.
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