FSCS deposit protection: how it works

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Most of the savings accounts in our marketplace are from UK-based partner banks, meaning they’re protected by the Financial Services Compensation Scheme (FSCS). Because of this, you can rest assured that any savings products you open through the Raisin UK savings marketplace will be protected up to the statutory limit of £85,000 per person, per institution. Read on to find out how the FSCS works and what it covers. You’ll also learn more about its European equivalent, the DGS. 

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The rundown
  • FSCS protection: The FSCS is a deposit guarantee scheme that protects money you have in a UK-regulated bank (up to set limits) and pays compensation in the event that the institution fails
  • FSCS limits: Under the scheme, if your bank collapses the FSCS pays compensation up to the limit of £85,000 per person, per authorised financial institution/banking group
  • European protection: Deposits in European banks are protected under a similar initiative, known as the European Deposit Guarantee Scheme

What is FSCS protection?

The FSCS is the deposit guarantee scheme for the UK. It’s an independent body set up by the British government and funded by the financial services industry that protects deposits made by UK customers into accounts offered by regulated financial service providers. If a financial institution fails and can’t pay claims made against it, the FSCS steps in to help you recover your savings.

What does the FSCS cover?

FSCS protection covers deposits made by individuals into savings accounts up to £85,000 per person, per banking group, or up to £170,000 if you have a joint account, provided that the financial institution is regulated by the Financial Conduct Authority, the Prudential Regulation Authority, or both. FSCS protection is available for deposits with most UK high-street and online banks, and it will protect your money if a bank fails and is unable to return your deposits. It covers savings deposits, pensions, investments, insurance policies and home finance.

The FSCS will pay compensation up to the limit of £85,000 per person, per authorised financial institution/banking group. Should you have multiple deposits within a banking group, you will only be protected up to the statutory limit of £85,000, regardless of how many deposits you have within the group. This FSCS limit is for the total of all the savings accounts you have with the different bank brands under the authorisation, irrespective of how many different institutions a person holds accounts with.

At Raisin UK, we will always let you know which banking group a savings account is being offered by, so you can make informed decisions as to which savings accounts are right for you.

What counts as a financial institution for the purpose of FSCS protection?

A financial institution is any company that deals with financial transactions, but when it comes to defining a financial institution in terms of deposit protection, the definition gets a little complex. That’s because many banks have been through a merger or have been taken over by another banking group. 

This makes it harder for you to determine which banking group or financial institution the bank you are dealing with is in. It’s important to know this as the FSCS will only cover your deposit up to £85,000 per banking group. You can find out which banking group or financial institution a bank belongs to through the Financial Conduct Authority (FCA).  

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How FSCS deposit protection works

If you think you have a claim from a financial firm that’s failed, you can make your claim directly with the FSCS if it’s within the UK. If it is found that your financial firm has failed, then the FSCS should automatically return your money, up to £85,000 per person, per banking group.

Timescales for the return of your money can vary between different banks and banking groups, depending on if they hold your savings in a ‘direct’ or ‘trust’ model. Funds held directly by the bank are usually returned within 2-3 days. Funds held under a trust model can take up to three months to be returned, but in most cases will be returned sooner than this. You can find out more about the return of funds under the ‘Deposit Guarantee Scheme’ section of each partner bank here.

Are there any other deposit protection schemes available?

Yes, other deposit protection schemes are available. If you’ve opened a savings account with a partner bank registered in Europe, rest assured that you’ll be covered by the European Deposit Guarantee Scheme (DGS). It works in a similar way to the UK’s FSCS, and protects up to €100,000 (or the equivalent amount in a European country’s local currency) if the financial institution fails. This amount is guaranteed, irrespective of the financial means of any country-specific DGS.

A separate scheme applies if the bank is registered in Sweden. The Swedish Deposit Protection Scheme, which is an independent body set up by the Riksgälden, also reimburses you if the institution in which you have money collapses. The Raisin UK partner bank covered by the Swedish Deposit Protection Scheme is HoistSavings. It protects deposits up to a total of SEK 1 050 000 per person.

If you’re not sure which scheme deposits will be protected under, simply look for the FSCS or European DGS logo next to the name of the bank or savings account you’re interested in.

Are my savings safe?

If you deposit £85,000 or less in savings with a regulated UK bank, you will be protected by the FSCS. Any additional funds above £85,000 would not be protected by the scheme, and this includes interest accrued on a savings account that would take your total balance via Raisin UK above £85,000.

If you want to deposit more than £85,000 into a savings account, you could spread your savings across different savings accounts with different banking groups in order to protect your deposits.

It can be beneficial to open multiple savings accounts regardless of how much you deposit, in order to take advantage of the features offered by different savings account types and use them for different purposes.

How does Raisin UK work?

If you want to quickly and easily open savings accounts with FSCS or DGS deposit protection, register for a Raisin UK Account and log in to apply. Opening an account is free, and once you’ve been approved, all you need to do is make a deposit and watch your savings grow.

If you have any further questions, our UK-based Customer Services Team will be happy to help.

Get the inside scoop

Want to be in-the-know on all things savings?
Of course you do. Sign up and be the first to find out about top rates as soon as they land,
exclusive account holder-only offers, and the latest money news.