Is my money safe in the bank?

Following the financial crisis of 2008, the £500 billion government bailout that followed and the economic impact of the coronavirus crisis, people are more concerned than ever before about where to put their savings. As a savvy saver, it’s important to educate yourself on whether your money is safe in the bank, what could happen if things go wrong, and how to stay safe when saving online. 

Thanks to the Financial Services Compensation Scheme (FSCS), a statutory scheme in the UK that protects customers of authorised financial institutions, up to £85,000 of your money is protected per person, per bank- provided that the financial institution is regulated by the Financial Conduct Authority, the Prudential Regulation Authority, or both.

The FSCS stands for the Financial Services Compensation Scheme, and it’s designed to compensate you in the event of your financial institution failing. It covers a range of financial products, including deposits, pensions, investments, bank accounts, mortgages and insurance. 

It can also compensate you if your financial institution has given you misleading advice and has since closed down. The FSCS is a free, independent service set up by the UK government. It’s important to note that the FSCS doesn’t cover some financial products, and they may limit the amount of compensation you can receive.

It’s common for one financial institution to own multiple banks in what’s known as a banking group, meaning that the banks within a group are linked together, as is the case of Bank of Scotland and Halifax.

To ensure that all your money is covered by the FSCS (because up to £85,000 of your money is covered per person, per bank), you’ll need to know who holds the license under which your bank operates. You can find this out by searching online for ‘who owns who in banking’.

Any money you hold in a FCA-regulated online bank receives the same FSCS protection as traditional high street banks in the UK. Online banks can help to keep your money safe online in the following ways*:

• Using secure login processes like one-time passcodes and two-factor authentication

• Encrypting data so that only you and your bank can read it

• Monitoring payment patterns to identify any suspicious transactions

• Refunding any money unlawfully taken by fraudsters - though an excess fee may apply

*Security measures may differ between financial institutions.

However, it is worth noting that there are steps the online bank account holder can take to protect themselves. Using a strong password with a unique combination of characters and numbers is one way to help keep your data protected and enhance your online safety.

The information provided here is for informational and educational purposes only and does not constitute financial advice. Please consult with a licensed financial adviser or professional before making any financial decisions. Your financial situation is unique, and the information provided may not be suitable for your specific circumstances. We are not liable for any financial decisions or actions you take based on this information.

Because the FSCS protects up to £85,000 of savings per person, per bank, splitting your money across accounts held with different banks can extend your coverage if you have more than £85,000 in savings. You should also check who owns the banks you want to save with, because if they are ‘different’ banks but operate under the same banking license, you’ll still only be covered for £85,000 in total.

It is also worth pointing out that, in certain circumstances, the FSCS will protect savings beyond the bank protection limit. If you receive an inheritance or the proceeds from selling your house, for example, your funds may still be protected for up to six months provided they amount to less than £1m.

The Prudential Regulation Authority has put forward a proposal to increase the UK savings protection limit to £110,000, partly to account for inflation. If it goes ahead, the new limit could potentially come into effect in December 2025*.

There are a few other ways you can protect your savings, including the following: 

• National Savings and Investments (NS&I). All money in the state-owned bank NS&I is fully Government-backed, meaning money deposited is as near to 100% safe as possible. The only way you would lose your money here is if the UK Government goes bankrupt or collapses, which is extremely unlikely.

• Pay off your debts. Most credit cards and loans cost a lot more in interest than you earn on your savings, so by repaying any debt with your savings, you’ll be better off than before. For some useful tips on this, see our handy guide to paying off debt.

• Overpay your mortgage. Similar to paying off debt but with a tangible gain on the other side, reducing your mortgage costs is like earning cash as you’ll pay less interest in the long run. By paying off your mortgage, you could also enjoy better deals when it comes to remortgaging.

• Stay informed. The Prudential Regulation Authority has put forward a proposal to increase the UK savings protection limit to £110,000, partly to account for inflation. If it goes ahead, the new limit could potentially come into effect in December 2025*.

You can protect yourself when banking online by:

• Keeping your software up to date
• Not opening any email attachments or links if you suspect that they’re not genuine
• Never sharing private information such as passwords or security phrases
• Creating a strong password and using an online password manager rather than writing down your password on paper
• Looking after any paper statements you receive
• Being wary of fraudulent phone calls. Remember: banks will never ask you to transfer money to another account

Spotting scams and being alert to any suspicious activity is extremely important when banking online. Financial scams are still an all-too-common occurrence in the UK, with the majority of payment scams beginning online, according to research carried out by UK Finance in 2024**.

A frequent scam at the moment sees criminals promoting popular savings accounts such as fixed rate bonds and ISAs on fake, or cloned, websites in order to steal money and sensitive information from would-be savers.

Explore our online safety guide for more useful tips and information, including how to spot a phishing email and how to check if a website is legit.

If you bank with a UK-authorised institution, online banking services are protected. The way you bank doesn’t make a difference. The important thing is that your bank is covered. Find out more about the safety of online banking.

In the event that your bank or building society collapses, the FSCS will automatically compensate eligible depositors within seven working days. You do not need to make a claim.

Your banking institution will need to be authorised – so the first thing you should do is check that this is the case. You can do this directly on the FSCS website using their bank & savings protection checker.

Money saved in an offshore account usually isn’t covered by the FSCS, meaning your money won’t be as protected. However, some offshore locations including Jersey, Guernsey, Gibraltar and the Isle of Man, now have their own financial compensation schemes, so some of your savings might be guaranteed if your provider goes under.

Ultimately, you can’t determine whether or not a bank will fail, and there’s no real way to determine the likelihood of this happening. What you can do, however, is mitigate your risk of losing savings by spreading them out across different authorised institutions. Using a marketplace like Raisin UK makes this easier, as you can manage accounts from multiple institutions from a single account.

Keeping your money secure is our top priority. Here are some ways we keep your money safe:

• We’re authorised and regulated by the FCA (FRN: 813894), and we only work with banks and building societies that are protected by the FSCS (or the European equivalent), so you can deposit, manage and save with absolute confidence.
• Money held in your Transaction Account, provided by ClearBank, is also FSCS protected, so your money is still protected when transferring to and from your Transaction Account to savings accounts held on the Raisin UK marketplace.
• We use Secure Sockets Layer (SSL) and Transport Layer Security (TLS) technology for server authentication and data encryption, to ensure that your personal data and all communications sent through your Raisin UK Account are 100% safe and secure.

Find out more about how we keep your money safe at Raisin UK.

With Raisin UK, you can compare savings accounts, open accounts with a single registration, and manage all your savings with one secure login. Plus, it’s easy to spread your savings across multiple banks and building societies to extend your deposit protection. Now that you understand how your money is protected, find out how Raisin UK can help you get more from savings.

*https://www.bankofengland.co.uk/news/2025/march/the-pra-proposes-raising-fscs-deposit-protection-limit

**https://www.ukfinance.org.uk/news-and-insight/press-release/fraud-remains-major-problem-over-ps1-billion-stolen-criminals-in