Can you trust small banks with your savings?
Summary
TLDRThe video script discusses the importance of evaluating smaller banks before entrusting them with your savings. It advises checking the Financial Conduct Authority's register for legitimacy and ensuring funds are protected under the Financial Services Compensation Scheme. Customer service, access methods, and ethical considerations are also highlighted as crucial factors. The script reassures viewers that smaller, authorized banks can offer competitive interest rates and quality service, urging them to use a provided checklist to make informed decisions.
Takeaways
- 🏦 Check the Financial Conduct Authority's register to verify if a bank is authorized and legitimate.
- 🔐 Authorized banks offer better protection and access to the Financial Ombudsman service for dispute resolution.
- 💼 The register provides genuine contact details and websites, reducing the risk of scams.
- 💵 Ensure your money is protected under the Financial Services Compensation Scheme, which covers up to £85,000.
- 🌐 Be aware that smaller or overseas banks might have different protection schemes, affecting your savings' security.
- 💬 Research customer service quality through online reviews and personal experiences.
- 📞 Consider the bank's preferred communication methods and whether they align with your needs.
- 🏢 Digital-only banks may not have physical branches, which could affect your banking preferences.
- 🌐 Ethical considerations are important; research the bank's funding practices to ensure they align with your values.
- 🔍 Use resources like Smart Ming and Best Buy tables to compare banks and make informed decisions.
Q & A
How can you verify if a bank is legitimate according to the script?
-You can verify a bank's legitimacy by checking the register of the Financial Conduct Authority to see if it is authorized.
What benefits does putting your money with an authorized firm provide?
-Putting your money with an authorized firm provides better protection if things go wrong and access to the Financial Ombudsman service.
How does the Financial Ombudsman service assist customers?
-The Financial Ombudsman service is a free service that handles disputes between banks and customers, where you can escalate your complaint if you don't get an initial satisfactory response.
What does the financial services compensation scheme protect and up to how much?
-The financial services compensation scheme protects up to £85,000 of your savings held with a bank, building society, or credit union.
What are the implications of a bank not being covered by the FSCS?
-If a bank isn't covered by the FSCS, your money isn't protected under the scheme, and you might face issues like exchange rate problems and communication barriers if it's an overseas bank.
How does a digital-only bank ensure customer money is protected?
-A digital-only bank, like an Electronic Money Institution (EMI), holds customer money in a separate, ring-fenced account, ensuring it's protected even if the provider fails.
What is the significance of a bank being backed by the government like NS&I?
-A bank backed by the government, such as NS&I, ensures that your money is 100% secure even if it's not covered by the FSCS.
How can you gauge a bank's customer service for smaller or lesser-known banks?
-For smaller or lesser-known banks, you can gauge customer service by checking Google reviews, reviewing feedback on financial service sites like Smart Money People, and testing the bank's contact methods.
What factors should you consider when evaluating a bank's accessibility for your money?
-You should consider if the bank is digital-only or has physical branches, and whether their communication methods align with your preferences, such as phone, email, or online chat.
Why is it important to know about a bank's ethical stance when choosing where to save your money?
-Knowing a bank's ethical stance is important to ensure that their funding practices align with your values, as some banks may invest in areas like fossil fuels or have headquarters in countries subject to boycotts.
What alternative options are available for ethical banking?
-For ethical banking, you might consider banks with explicit ethical policies like Triodos, or Sharia-compliant banks like Al Rayan, which cannot invest in prohibited areas under Islamic law.
Outlines
🏦 Ensuring Legitimacy and Safety of Smaller Banks
The paragraph discusses the importance of verifying the legitimacy of smaller banks before entrusting them with your savings. It advises checking the Financial Conduct Authority's register to confirm if a bank is authorized, which ensures it can offer promised services and provides better protection in case of issues. The paragraph also highlights the benefits of being with an authorized firm, such as access to the Financial Ombudsman service for dispute resolution. It mentions the protection offered by the Financial Services Compensation Scheme (FSCS), which covers up to £85,000 of savings, and notes that not all smaller banks may be covered by FSCS, suggesting alternative protection methods such as overseas schemes or government backing. The paragraph also touches on the difficulty of locating smaller banks and the need to verify their contact details to avoid scams.
🌐 Ethical Considerations and Customer Service in Banking
This paragraph focuses on the ethical aspects of banking and the importance of aligning with personal values when choosing a bank. It points out that while some banks may offer high interest rates, they might be involved in controversial investments or headquartered in countries subject to boycotts. The paragraph suggests looking for ethical and sustainable banks, such as Triodos, which has ethical policies, or building societies like Nationwide that primarily lend to home buyers. It also mentions Sharia banks, which adhere to Islamic law and avoid investing in prohibited sectors. The paragraph concludes by emphasizing the reassurance of FSCS coverage for smaller banks, the potential for higher interest rates, and possibly better customer service. It advises viewers to use the provided checklist to evaluate smaller banks and mentions the availability of updated Best Buy tables on the be clever with your cash app.
Mindmap
Keywords
💡Legitimate
💡Financial Conduct Authority (FCA)
💡Financial Ombudsman Service
💡Financial Services Compensation Scheme (FSCS)
💡Electronic Money Institution (EMI)
💡Customer Service
💡Digital-Only Banks
💡Ethical Banking
💡Sharia Banks
💡National Savings and Investments (NS&I)
Highlights
Best Buy savings tables feature lesser-known banks that are vetted for legitimacy.
Ensure bank legitimacy by checking the Financial Conduct Authority's register for authorization.
Authorized banks offer better protection and access to the Financial Ombudsman service.
The register provides genuine contact details and websites, reducing scam risks.
Inquire if the bank's money is protected under the Financial Services Compensation Scheme, covering up to £85,000.
Some banks may offer protection through foreign compensation schemes or partner banks.
Electronic Money Institutions hold money in a separate account, offering protection post-insolvency costs.
Consider government-backed banks for 100% secure deposits, even without FSCS coverage.
Research customer service quality through online reviews and personal experiences.
Check if the bank's communication methods align with your preferences, such as phone, email, or chat.
Assess the bank's accessibility, considering the convenience of digital-only services versus physical branches.
Ethical considerations are important; research the bank's funding practices to ensure they align with your values.
Some banks, like Triodos, have ethical policies, while others may invest in controversial areas.
Sharia banks, due to Islamic law, cannot invest in prohibited sectors like tobacco, arms, or gambling.
Smaller banks can offer higher interest rates and potentially better customer service than High Street banks.
Use the provided checklist to evaluate if a smaller bank meets your requirements for safety, service, and ethics.
Stay updated with Best Buy tables at becleverwithyourcash.app for the latest financial insights.
Transcripts
every week the Best Buy savings tables
are full of banks you've probably never
heard of now you don't have to worry
with the ones you see on our savings
Pages because we ensure that they're
legitimate so you know that you can
trust your money is safe but there are
other elements of banking that may be
important to you such as ethics customer
service account access those kind of
things so it's worth having a closer
look so if you're interested in putting
your money in one of these smaller Banks
here are the questions you should be
asking yourself so the first thing you
want to ask yourself is is the bank
legitimate and you can check this by
looking on the register of the financial
conduct authority to check whether it's
authorized now this means it can offer
you the services that it's promising
because it has the permission from the
regulator now it's really important to
go and put your money with an authorized
firm because you get better protection
if things go wrong and it gives you
access to the financial Ombudsman
service now this is a service it's free
and it handles disputes between Banks
and other financial services and its
customers and it's where you escalate
your complaint when you don't get a
initial satisfactory response this
register is also really useful because
it gives you the genuine contact details
and the website of the firm which
reduces the risk of dealing with a
cloned company that's trying to scam you
it can sometimes be a bit tricky to
locate these Banks as sometimes they
might be trading under different names
but if you're unsure it's probably
better to look elsewhere anyway you also
want to ask yourself how your money is
protected so ideally you want your money
covered under the financial servic
compensation scheme which protects up to
£85,000 of your savings held with a bank
Building Society or credit union you
might find that smaller Banks or
financial providers may be authorized
but aren't covered by the fscs which
means your money isn't protected under
the scheme however there may be other
ways that providers protect your money
so for example if you put your money
with an overseas Bank you may be
protected under the compensation scheme
of their country however if something
goes wrong you might face exchange rate
issues and potentially problems with
communication if you don't speak the
language if we look at electronic money
institutions your money is held in a
separate ring fenced account so an Emi
is a provider like Plum and in a case
where Plum or another provider fails you
would be paid out from The Ring fenced
account but only after insolvency cost
are settled so that's something to
consider or it may use a partner Bank to
hold funds and if this bank is covered
by the fscs your money will be too so if
we look at chip for example it doesn't
have its own fscs cover but all the
money is held with clear bank which does
if you look at nsni or national savings
and Investments you will see that it's
not covered by the fscs either however
it's backed by the government so your
money is 100% secure so next you want to
find out about the Bank's customer
service now this can be really hard to
know with smaller providers or ones that
you've never never heard of or kind of
the new ones that are popping up if you
look at the big Banks it's a lot easier
they have to publish their banking
satisfaction survey results every year
prominently in the branch and on the
website which shows you how they
compareed to other banks on the High
Street and how customers feel about them
you're also more likely to have friends
and family who use the bigger Banks and
they can tell you of their experience as
well so with smaller Banks the first
place to start is on Google so Google
the reviews find out what other
customers are saying about their
experience with the bank also check the
reviews on Smart Ming people our sister
site which is completely focused on the
financial services you can also check
the contact details on the website and
find out if that's the right mode of
communication that you prefer for
example I love a phone number and I
probably wouldn't use a bank that didn't
have a phone number because that's how I
want to be able to speak to customer
services and get any issues sorted out
but you might be comfortable with email
or online chat features but have a look
on the website and see what it's
offering and then test it give it a call
see how long it takes to answer the
phone if it has a phone number or how
long it takes to get back to you and see
if you're satisfied with that you also
want to ask yourself if you're happy
with the way that the bank allows you to
access your money so a lot of these
smaller Banks might be digital only
which means they've got no branches
which is fine if you're happy with that
way of managing your money having
branches doesn't make a bank any more
legitimate than one that doesn't but it
is all about your preference so I think
as well with these kind of digital only
banks they're kind of geared up to
provide a digital only service so
they're quite good at what they offer
and I think when it comes to savings a
lot of the time people aren't touching
them so you're not going to need that
much back and forth or that much by way
of kind of communication you know
especially if you've got some of the
longer term savings accounts such as you
know fix rate bonds but again it is up
to you and it's a consideration when you
are looking at these Banks and lastly
who is this bank this has more to do
with banking ethics and if this is a
priority to you you'll want to know a
bit more about the provider and what
they're funding to ensure that they
align with your values because it's not
always clear so for example you might
have noticed that Israel and Qatar have
been subject to boycotts in recent Years
yet your money might be sitting in banks
with headquarters there for example UTMB
which stands for Mahi teot bank is an
Israeli bank and it's a similar story
with qib which stands for Qatar Islamic
Bank both have offered top rates
recently and you might have seen them in
the Best Buy
tables however this isn't just a problem
with smaller Banks larger Banks aren't
particularly ethical either you might
find if you kind of dig deep they are
investing in fossil fuels and other
types of areas that you might not agree
with however there are some ethical
sustainable Banks out there that you can
find so for example some banks like
triodos they have ethical policies while
building societies such as Nationwide
must lend 75% of their funds to home
buyers meaning that they don't really
have that much cash to invest elsewhere
you might also be interested in Sharia
Banks such as Al Ryan and Bank of London
and the Middle East which that you might
often see them in the Best Buy tables as
well so these Banks because of Islamic
law they can't use customer money to
invest in things that go against it such
as tobacco arms or gambling and things
like that so should you put your money
with a smaller Bank I can understand why
people may feel concerned about these
smaller Banks but if they're covered by
the fscs they're just as safe as the
more established providers on the High
Street you'll get a much higher interest
rate than High Street Banks and maybe
even better customer service but do go
through the checklist above and see if
you're happy with what it's offering
Remember Me Andy and the team are
updating Our Best Buy tables twice a day
at be clever withy yourcash.app
thank you so much for watching check out
these videos here for more ways to make
the most of your money
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