Ethan Riley
In 2023, Metro Bank customers were feeling nervous about the safety of their savings due to negative headlines and rumours of a bank run. However, Metro Bank is a UK-regulated bank, and money in customers' accounts is covered by the Financial Services Compensation Scheme (FSCS). This means that if the bank fails, FSCS can step in to compensate customers up to £85,000 per individual, with some circumstances allowing for coverage of up to £1 million.
| Characteristics | Values |
|---|---|
| Safety of savings | Covered by the Financial Services Compensation Scheme (FSCS) up to £85,000 |
| Temporary high balances | Covered for some types of funds up to £1 million for six months |
| Interest rates | Limited Edition rates are variable and reviewed regularly |
| Scam prevention | Customers are advised to call Metro Bank if they are contacted by someone claiming to be from the bank and asking for account details |
| Account types | Instant Access Savings Account, Personal Savings Account, Fixed-rate bonds |
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What You'll Learn
Is Metro Bank a safe place for my savings?
In 2019, Metro Bank was forced to reassure customers about the safety of their money after 'false rumours' about the bank's financial health circulated online. Photos posted on social media of customers queuing in various London branches led some to fear Britain was looking at another bank run.
Despite this, Metro Bank is a UK-regulated bank and money in customers' accounts is covered by the Financial Services Compensation Scheme (FSCS). This means that if a regulated financial firm is no longer trading and can't pay a customer's claim, FSCS can step in to pay compensation. It protects up to £85,000 of deposits per individual, per financial institution, and also covers mortgages, insurance, and investments. In some circumstances, you could be covered for more than £85,000. For example, if you have money resulting from things like house sales, redundancy pay, or inheritances, you'll be covered for some types of funds up to £1 million for six months.
Metro Bank offers a range of savings accounts, including Instant Access Savings Accounts, which you can open online or in-store with just £1. All interest on UK savings accounts is paid without the deduction of tax, although you will have to declare interest earned if you exceed your annual Personal Savings Allowance set by HMRC. Cash ISAs are tax-free, meaning you do not have to declare any interest earned.
If you are concerned about the health of your savings, you can close your fixed-term deposits without loss of interest or any penalty up to 14 days after you've opened them.
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What is the Financial Services Compensation Scheme (FSCS)?
The Financial Services Compensation Scheme (FSCS) is the UK's statutory compensation scheme for customers of authorised financial services firms. It was set up by the government under the Financial Services and Markets Act 2000 and has been operationally independent since 2001. The FSCS is funded by levies on authorised financial services firms and has helped more than 4.5 million people since its inception, paying out over £26 billion in compensation.
The FSCS can step in and pay compensation if a financial firm goes out of business and cannot pay a claim against it. It covers deposits, insurance, debt management, funeral plans, investments, pensions, mortgages, and payment protection insurance to varying amounts. The rules of the FSCS are made by the Financial Conduct Authority (FCA) and are contained in its handbook. The FSCS board of directors is appointed by and ultimately accountable to the FCA.
The FSCS is the UK's Deposit Guarantee Scheme, protecting UK-authorised banks, building societies, and credit unions up to £85,000 per depositor in the event of their insolvency. If deposits or savings are held in a joint account, the total of FSCS protection doubles to £170,000. It is worth noting that the FSCS covers different financial products to different levels of protection. For example, certain qualifying temporary high balances are protected up to £1 million.
In the context of Metro Bank, it is covered by the FSCS scheme, which means your money is safe up to the value of £85,000.
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What are the best savings accounts offered by Metro Bank?
Metro Bank offers a range of savings accounts to suit different needs. Here are some of the best savings accounts offered by Metro Bank:
- Instant Access Savings Account: This account offers flexible access to your savings, allowing you to withdraw funds and transfer them to another Metro Bank account or beneficiary using online banking or the mobile app. You can open this account with just £1 and easily manage your savings through various platforms.
- Regular Savings Account with Debit Card: This interest-bearing account comes with a debit card that can be used for bill payments, purchases, and cash withdrawals at over 2,200 Metro Bank ATMs. It offers the convenience of checking your balance anytime through ATMs, mobile apps, or online banking platforms.
- Fixed-Term Deposits: Metro Bank offers fixed-term deposits with guaranteed interest rates for periods ranging from one to three years. These accounts provide tax-free interest on lump sums or ISA transfers, and you can choose the term that best suits your savings goals.
- Young Savers Account: While not specifically mentioned as a separate account type, Metro Bank does refer to a Young Savers account, indicating that they offer savings accounts tailored for younger individuals.
It is important to note that Metro Bank is covered by the Financial Services Compensation Scheme (FSCS), which means your savings are protected up to £85,000. This provides peace of mind and security for your deposits.
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How do I protect my money in a Metro Bank account?
If you're concerned about protecting your money in a Metro Bank account, there are several things you can do to ensure the safety of your funds. Firstly, it's important to understand that Metro Bank is covered by the Financial Services Compensation Scheme (FSCS), which means that your savings are protected up to £85,000. This provides a level of security for your money in the event that the bank encounters financial difficulties.
To further protect your money, consider utilising Metro Bank's Instant Access Savings Account. This account offers flexibility and easy access to your funds. You can open this account with as little as £1, and it provides the option to withdraw money and transfer it to another Metro Bank account or a nominated beneficiary using online banking or their mobile app. Additionally, Metro Bank recommends using a secure browser to safeguard your data and keep your information safe.
It's worth noting that Metro Bank has introduced limits on the amount of cash customers can deposit into their accounts each day. These limits are intended to help keep your money safe and may vary depending on the type of account you hold. If you're depositing foreign currency, the limit will be based on the GBP equivalent using the exchange rate on the day of the deposit.
While Metro Bank provides security measures, it's always a good idea to diversify your funds across multiple accounts or institutions. This can provide an additional layer of protection for your money. Additionally, keep yourself informed about any updates or changes to their policies, interest rates, or terms and conditions. Metro Bank is known to review their Limited Edition interest rates regularly, so staying informed can help you make timely decisions about your savings.
In summary, your money is generally safe with Metro Bank due to FSCS protection. However, to further protect your money, utilise their Instant Access Savings Account, practice good digital security, stay informed about their policies, and consider diversifying your funds.
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What are the alternatives to saving with Metro Bank?
If you are looking for alternatives to saving with Metro Bank, there are several other banks that offer similar services. Here are some options to consider:
Starling Bank
Starling Bank is a digital bank that offers a range of personal and business banking services, including current accounts, overdrafts, loans, and money transfer services. Starling is based in London and provides an intuitive mobile app for its customers, making it a good choice for those seeking a modern and mobile-first banking experience.
HSBC
HSBC is a well-known banking and financial services company offering a wide range of products, including personal banking, corporate banking, investment solutions, and wealth management services. HSBC also provides accounts, credit cards, loans, mortgages, and insurance, making it a comprehensive alternative to Metro Bank.
Barclays
Barclays is another financial services company offering a broad range of products similar to Metro Bank. In addition to digital and personal banking, Barclays provides corporate banking, wealth management, and international banking services. They also offer insurance products, investment services, mortgages, loans, and savings accounts.
Santander UK
Santander UK offers various banking and financial products, including current accounts, savings, mortgages, loans, credit cards, insurance, and investment products. They serve both individual customers and businesses and are based in London.
First Direct
First Direct is often praised for its customer service and is recommended for those seeking multiple current accounts to protect against technical issues or card-related problems. However, some users have criticised its online facilities as rudimentary.
In addition to the above, there are other banks that can be considered as alternatives to Metro Bank, including Zempler Bank (formerly Cashplus), Tandem Bank, Allica Bank, and Kroo. Each of these banks has its own unique offerings and features, so it's worth researching which one best aligns with your specific needs and preferences.
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Frequently asked questions
Yes, your money is safe with Metro Bank. It is a UK-regulated bank and money in customers' accounts is covered by the Financial Services Compensation Scheme (FSCS). The scheme covers up to £85,000 of deposits per individual, per financial institution.
If Metro Bank goes bust, the FSCS can step in to pay compensation. It covers up to £85,000 of deposits per individual, per financial institution. In some circumstances, you could be covered for more than £85,000. For example, if you have temporary high balances (THBs) from things like house sales, redundancy pay or inheritances, you'll be covered for some types of funds up to £1 million for six months.
If you want to withdraw your money from Metro Bank, you can close your fixed-term deposits without losing interest or facing any penalties up to 14 days after opening them.
If you have an Instant Access Savings Account, you can withdraw money from your savings at any time.
