When it comes to safeguarding your savings, understanding the protection offered by financial institutions is paramount. The Financial Services Compensation Scheme (FSCS) stands as a safety net for depositors, offering coverage in case of a bank’s failure. However, a common query arises: is the £85,000 protection limit applicable per account or per bank?
Clarification is essential. The FSCS operates under the premise of providing compensation per person for each ‘authorised institution’ or banking group. It’s crucial to note that some bank brands are subsidiaries of larger banking corporations. Take, for instance, First Direct, which falls under the umbrella of HSBC. In such cases, despite multiple bank brands, the protection limit remains tied to the parent institution or banking group.
Therefore, whether you have multiple accounts within a single banking group or across various brands owned by the same overarching institution, the £85,000 protection limit stands for each person across all accounts within that particular ‘authorised institution’ or banking group. Understanding this distinction ensures that depositors can make informed decisions regarding their savings and financial security.
(Response: The £85,000 protection limit offered by the FSCS is applicable per person for each ‘authorised institution’ or banking group.)