My husband and I have our £20,000 savings in Metro Bank and I’ve read it’s in trouble – is my cash safe?
My husband and I read a couple of weeks ago that Metro Bank were paying 2 per cent on one-year fixed-rate bonds. This is a much better rate than our respective banks could offer.
A few days ago we each opened an account with Metro, putting in £10,000 each.
We now read Metro are in some trouble and wonder if we should withdraw our money. We are pensioners and can ill afford to lose our nest egg.
We were assured that we would be protected under the FSCS rules up to £85,000. Can you advise? – M.H. via email
Photos circulated on social media this weekend of customers withdrawing money from a number of branches of Metro Bank. The bank blamed ‘false rumours’ about its financial health
George Nixon, This is Money, replies: Last weekend Metro Bank was forced to reassure customers about the safety of their money, after ‘false rumours’ about the bank’s financial health circulated online.
That coincided with photos posted on social media of customers queuing in various London branches, including in Harrow, leading some to fear Britain was looking at another bank run.
Founded in 2010, Metro Bank isn’t old enough to remember Northern Rock, but clearly some of its customers saw the parallels.
The bank’s problems go back further than last weekend though. Metro has been mired in controversy over an accounting error since January that saw it underestimate the risk of some of its loans, meaning it needed more capital.
For the last 11 weeks, it has been searching for a £350million cash injection and small business depositors have pulled out £500million since the error was announced.
Metro put out a statement on Sunday after those circulating the rumours called for customers to pull their deposits out.
It said: ‘We’re aware there were increased queries in some stores about safe deposit boxes following false rumours about Metro Bank on social media and messaging apps. There is no truth to these rumours and we want to reassure our customers that there is no reason to be concerned.
‘We’re a profitable bank, rated No 1 for personal current account service by the Competition and Markets Authority and committed to serving our 1.7million customer accounts.’
So, what about your savings?
Individual savers, like you and your husband, are covered under the Financial Services Compensation Scheme for personal deposits. Savings are protected up to £85,000 per person, per bank, building society or credit union, while £170,000 is protected in joint accounts. Be aware that come brands share licenses and protection, however.
Savers are compensated if an FSCS-protected bank fails, and Metro is covered by the scheme – which means your money is safe.
If you’re really concerned about the health of your savings, then you can close your two fixed-term deposits without loss of interest or any penalty up to 14 days after you’ve opened them.
As you say you opened the accounts ‘a few days ago’, you should still be within that timeframe.
Gatehouse Bank and United Trust Bank both pay a 2 per cent one-year fixed-rate on deposits worth £10,000, though both are only available online. You can check the best rates in This is Money’s independent best buy savings tables.
However, it’s worth pointing out that the reason business depositors have likely pulled their rates is because they may not necessarily be covered by the Financial Services Compensation Scheme.
Businesses are covered if they meet two of three criteria; fewer than 50 staff, less than £6.5million in turnover and a balance sheet of £5million on their balance sheet.
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