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If you have savings with Northern Rock then beware that the current 100% savings guarantee offered by the Government will revert to the less generous Financial Services Compensation Scheme (FSCS) from 24 May 2010.
This means that rather than enjoying unlimited protection should Northern Rock default, savers will only be covered up to £50,000 per person.
If you have a fixed term account then the 100% guarantee will continue to apply for the remainder of the term. But open a new account from today and you’ll simply be covered by the FSCS.
Northern Rock’s interest rates are uncompetitive with the best in the market and in some cases are downright awful. So if you’ve been harbouring money with the ‘Rock’ in a variable rate account to benefit from the Government guarantee there’s little reason to stay after 24 May. I’d suggest you start shopping around for a better deal.
Rates paid on Northern Rock variable rate accounts as at 24 February 2010:
| Account | Annual Interest (gross) | Notes |
|---|---|---|
| E-Saver | 1.85% | |
| E-Saver Issue 2 | 2.50% | Includes 1% bonus for 12 months |
| 30 day Cash ISA | 1.80% - 2.15% | Includes 0.7% bonus for 6 months |
| Instant Access Cash ISA | 0.80% | Rate guaranteed to be no less than 2% below BoE Base Rate |
| Silver Savings Issue 2 | 1.35% | 0.1% interest below £5,000 |
| Silver Savings 30 Issue 2 | 1.45% | 0.1% interest below £5,000 |
| Branch Saver Issue 3 | 1.90% | |
| Branch Instant Access Issue 2 | 0.25% - 0.75% | |
| Select 120 Issue 2 | 1.05% - 1.50% | Includes 0.75% bonus for 6 months |
| Current Account | 0.10% | |
| Save Direct | 0.25% | Rate guaranteed to be no less than 1.75% below BoE Base Rate |
| Save Direct 90 | 0.40% - 0.45% | Rate guaranteed to be no less than 1.50% below BoE Base Rate |
If you hold money in a variable rate account not listed above (i.e. it’s no longer available to new customers) then chances are you’re receiving a paltry rate of interest.
In all cases there are better rates currently available elsewhere, the table below highlights a few examples.
| Account | Annual Interest (gross) | Notes |
|---|---|---|
| Halifax Web Saver Extra | 2.80% | 30 days interest penalty on more than 1 withdrawal a year |
| Coventry BS 1st Class Postal | 3.15% | Includes 1.15% bonus for 12 months |
| Investec High 5 90 day Notice | 3.21% | Pays average of the top 5 acounts. |
| Standard Life Direct Access Cash ISA | 2.65% |
And if you’re thinking of opening a new savings account with Northern Rock don’t bother – there’s really little point.
Read this article at http://www.candidmoney.com/articles/article65.aspx
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