Northern Rock?

Question

A letter in today's paper asked if Northern Rock, now that its deposits are backed by a government guarantee, are a better investment than National Savings Certificates? Would there be any disadvantages in moving money from one to the other?

Answer 1

National Savings certificates are tax free for a start so depending on your rate if income tax, the real rate of interest you receive from national savings is much higher. However, NS&I certificates are fixed for a period of time so you won't be able to get you money straight away, but you'll generally get a better rate the longer you commit for.
In terms of the security of you money, I would say the NS&I is always the most secure, and there are much better banks/BS's to put your money withynthan the NR.
I'm not an expert but I would recommend Nationwide who have a great savings account or a yearly bond now paying something like 7%.
If you really want to make some money you could take a punt on some undervalued shares, but you some big hairy cojones (and a chrystal ball) to do that right now.
Try Motley Fool website for comparisons.
Basically your savings will be 99% safe, whichever (UK) bank you go with. Don't be like all these other muppets and get into a total panic over a couple of quids worth of bad debt!

Answer 2

The terms of the governments guarantee have now been published http://www.bloomberg.com/apps/news?pid=20601102&sid=aO_7NQnCOOKM&refer=uk . If one has an existing account one can deposit money into that account and the money and interest are guaranteed. If one has to open a new account there is no government guarantee.

Answer 3

I would say yes .. you can get a better rate of interest from NR ..

However you should check you don't loose out on 'inflation bonus' or loose interest due to making a short notice withdrawal...