After a consultation the Government and Financial Services Authority has concluded that Northern Rock’s strong capital and funding position means its retail savings guarantee is set to be released.
Existing fixed term accounts will retain the guarantee for the remaining term of the product. For example, For customers with existing fixed term savings accounts, such as Fixed Rate Bonds of 1, 2 or more years, the guarantee will remain for the full term of the product existing variable rate accounts will retain the guarantee for a further three months - until 24 May 2010.
Northern Rock savers will continue to be covered by the Financial Services Compensation Scheme which provides protection up to GBP 50,000 per person, the same as for other banks and building societies.
Gary Hoffman, chief executive said: “We welcome the Government’s decision to release the savings guarantee, following an appropriate period of notice for our customers. The guarantee remains in place until 24 May 2010 for customers with variable rate accounts, and fixed rate accounts are guaranteed until the end of the term, whatever that may be – possibly one, two, or more years.
“This is another positive step in the right direction and the decision reflects our good progress and the strong capital position of Northern Rock. The Company is returning to a level playing field and our savers will enjoy exactly the same level of protection, under FSCS, as customers of other UK banks and building societies.”
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