THE TELEGRAPH: Panicked savers are moving billions of pounds from high street banks into accounts that guarantee their deposits amid fears that another financial institution could collapse.
The few banks that guarantee 100 per cent of their customers' savings have seen a significant surge in the number of people opening accounts in recent days.
In the wake of the enforced nationalisation of Bradford & Bingley and Northern Rock, the emergency takeover of HBOS and a series of banking failures in Europe and America, consumers are seeking security for their money.
Currently, only the first £35,000 of a saver's deposits are protected. Gordon Brown has promised to increase this to £50,000, but this new limit is unlikely to come in for several weeks.
The Irish government meanwhile, has moved to guarantee, for the next two years, all customers' money deposited into one of the six big Irish banks – including those with branches in Britain.
Currently, only the Post Office - whose savings accounts are run by the Bank of Ireland, the taxpayer-backed Northern Rock and National Savings & Investments - the Government's savings scheme - offer a similar guarantee.
As a result, they have seen a surge in interest from consumers, while the high street banking industry warns it is suffering as a result.
The volume of interest was so great yesterday that Northern Rock was forced to pull its most popular account, and Anglo Irish Bank was not able to answer any more customer calls.
This is despite Anglo Irish Bank, for instance, offering some of the highest rates in the UK, with some fixed-term savings accounts offering more than 7 per cent.
According to analysts, billions of pounds has left British banks and entered either one of the Irish banks directly or the Post Office. Financial Crisis: Call for All Savers' Deposits to Be Guaranteed to End 'Panic' >>> By Harry Wallop, Consumer Affairs Editor | October 2, 2008
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