Are Your Savings Safe?

The financial Service Authority has been doing a lot of research in the last few months. They are looking at the UK savers and how safe their savings are going to be in the next little while. They believe that consumers who are trying to save need to look beyond the high interest rates in foreign banks as they enter the market to save money. While the foreign banks are a little risky with their rates it could be a great place to save money in the UK right now.

The Financial Services Authority released information just this week regarding savers and what they should do. There are several factors that should be considered not only involving the high rates, but also in how likely the other banks are to get into trouble. With the US and the UK market unstable in the last year because of the banks risky endeavours in the subprime market the foreign banks may just be where the consumers need to be.

Foreign banks have been trying to get British cash. In fact two of the Icelandic institutions have been hot to get savers in their banks regarding the British currency. They are finding that the British money is higher profitable right now given the circumstances so it is perhaps a good thing to be investing in these banks. The studies resulted in investments of 6 billion pounds in the foreign banks with more than 170,000 Icelandic accounts. Iceland is currently having a great economic growth. The country in the past has been famous for cod wars, but now they are taking a dramatic turn in their economy so that British individuals may find it better to invest in banks over there rather than in the UK at the moment.

Many of the foreign banks including the Icelandic banks have caused a stir in the British market. In the past year the tiny country of Iceland has gotten over 300,000 people in their nation and of these individuals 6 billion pounds of British internet savings in 18 months has been transferred to the little country. The question for many in the UK is whether the banks are actually financially stable. Can they support the great influx of online banking in the savings department from the British? Icesave is one of the largest banks in Iceland at the moment, and they have over 170,000 British investors at the bank. They are growing by 1000 depositors in a day. Kaupthing’s Edge Accounts that was just launched a month ago is one of the highest used online savings accounts by the British at the moment. Both the Icesave and Landsbanki have won their consumers by offering the highest savings rate available anywhere and especially in the UK at the moment. The financial strength they are showing combined with the savings one can have at the bank has created the influx of savings accounts. Some are still concerned though as the UK is driving up the stability, but could just as easily take it away.

Financial News March 2008
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