Customers Hurry to Deposit Savings in Guaranteed Banks
02/10/2008
Northern Rock has announced it is withdrawing a number of savings deals for new customers. The bank says it does not want to abuse its competitive advantage.
Government-backed Northern Rock has experienced a surge in demand for its savings accounts, as it is one of only a handful of banks offering a 100% guarantee for customers' savings. As such, the bank has experienced a "sizeable inflow" of deposits in the past few days.
As part of the nationalisation deal, Northern Rock made a commitment to cap its market share of UK retail deposit balances at 1.5%.
Another bank with a 100% guarantee is the Government's savings scheme, National Savings & Investments. A spokesperson for NS&I said they had noticed an "increase in volumes of calls" recently, but no figures were provided.
The Anglo Irish Bank also reported an increase in savings account enquiries after the Irish government announced on Tuesday that it would guarantee 100% of savers' deposits in six savings groups.
The British Bankers Association said that official figures for the flow of money out of savings accounts on Wednesday - when the US Government's bid to bail out Wall Street failed - would not be available for another 10 days.
Government-backed Northern Rock has experienced a surge in demand for its savings accounts, as it is one of only a handful of banks offering a 100% guarantee for customers' savings. As such, the bank has experienced a "sizeable inflow" of deposits in the past few days.
As part of the nationalisation deal, Northern Rock made a commitment to cap its market share of UK retail deposit balances at 1.5%.
Another bank with a 100% guarantee is the Government's savings scheme, National Savings & Investments. A spokesperson for NS&I said they had noticed an "increase in volumes of calls" recently, but no figures were provided.
The Anglo Irish Bank also reported an increase in savings account enquiries after the Irish government announced on Tuesday that it would guarantee 100% of savers' deposits in six savings groups.
The British Bankers Association said that official figures for the flow of money out of savings accounts on Wednesday - when the US Government's bid to bail out Wall Street failed - would not be available for another 10 days.
