Best Place for Savings

[smurfchops]

What is the best place for savings, after the Northern Rock fiasco, a bank or a building society? And should we spread our money around, say no more than �35,000 anywhere ??

[kujawski]

stick it in a box under your bed, or multiple boxes

[tubeway]

It depends what sort of acess to your money you want , if you want to take an income from it, how much you are saving etc etc. speak to a financial advisor - they should be able to help.

PS I have heard that shares in Northern Rock are quite a good buy at the moment.

PPS Wouldn't it be funny if there was a takeover bid for Northern Rock and all of those people who panicked and took their money out, missed out on the windfall payments

[kwicky]

I thought that money in Northern Rock was safe. However there was an article in todays paper saying that if any company was in financial trouble it would be illegal of any EU government to bail them out which is what we are trying to do?

[tubeway]

It is the Bank of England not the government, and they are lending NR the money at fairly high interest rates - not trying to bail them out. If they thought that there would be a problem with NR then they would not have made the loan

[kwicky]

I'm still not convinced they are skint as you call it. Many businesses have gone to the wall because of cash flow where they are owed money but is not being repaid. Northern Rock is in a similar position where its mortgages are not being repaid until many years hence. If the Bank of England is private how come Gordon sold all those gold bars some years ago?

[WendyS]

If you have more than �35,000 in savings and are worried about its security, then spread it around a number of institutions. But actually, despite all the media attention on Northern Rock, I believe savers money will be safe there because the Government /Bank of England will act as a guarantor. Quite simply, Gordon Brown knows that his government would not survive if savers lost their money. Labour have screwed up Iraq, Foot & Mouth Disease, and a hundred other things. They know they have ruined many peoples' future already by destroying final salary schemes. A collapse of Northern Rock would simply be the last nail in t e government's coffin, so they won't allow it to happen.

[Hammer]

Northern Rock is not skint and not in danger of collapse. It is finding it difficult to borrow from other banks - a usual daily occurance by all banks - because the credit markets are screwed because of the collapse of the US sub-prime mortgage market.

Northern Rock has a higher than average loans to deposits ratio (ie, it lends more out than savers pay in) and always has done, therefore they rely on borrowing from other banks more than most banks do. All perfectly normal and nothing to worry about.

The Bank of England has therefore done what it is supposed to do as the 'lender of last resort' and has lent money to NR at its penalty rate because they can't borrow from elsewhere.

What will probably see them getting bought out by someone like Barclays or HSBC is that their name is now mud because of the mass hysteria, and they won't be able to attract new customers, so they will probably just roll over and let a takeover happen.