What is FSCS protection?

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The Financial Services Compensation Scheme (FSCS) is an independent fund set up by the government to help protect people’s money.

The FSCS covers companies that have been authorised by the UK regulators, the Financial Conduct Authority (FCA) or the Prudential Regulation Authority (PRA). And because Monzo is a regulated bank, it means every eligible deposit is protected.

So if Monzo or any other bank or building society goes bust, you won’t be left out of pocket.

How does it work?

If a bank, building society, credit union or other financial institution fails, the FSCS will protect up to £85,000 the money you have at each institution. This is sometimes known as the deposit guarantee scheme.

That means you’ll get any money in your account back within a week if your bank goes out of business.

Because of the way the £85,000 limit works, there are a few things you need to bear in mind:

  • Don’t exceed the £85,000 limit: If the money in your current account is over the £85,000 limit for FSCS protection, you might want to spread your money across multiple accounts, to make sure it's all protected. Having different types of account at a financial institution doesn't "reset" the limit - meaning if you have both a current account and a savings account with the same bank, you'd only receive the £85,000 FSCS cover once, and not on both accounts.

  • Some banks are linked: Remember that some banks (like HSBC and First Direct) share the same banking licence, which means the £85,000 limit applies to the money you have at both banks.

  • Joint accounts are covered: The £85,000 limit applies to each person, not each account. So if you have a joint account with a partner, your money’s protected up to £85,000 each, or £170,000 altogether.

There are also some exceptions to the £85,000 limit. If you have a big balance in your bank account temporarily because of a life event like inheriting money, being made redundant or selling your house, the FSCS will cover up to £1 million. Just remember that this extra covered deposit only lasts for up to six months!

Is Monzo covered?

Yes! Because we’re a bank, Monzo accounts are covered by the FSCS. That means up to £85,000 of the money in your account is protected, if anything should ever happen to Monzo.

You can find out more about how your money’s protected on the FSCS website.

This post was updated on September 22 2020