What is FSCS protection?

Read the article

The Financial Services Compensation Scheme (FSCS) is an independent fund set up by the government to 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), like banks, building societies, credit unions or other financial institutions.

And because we're a regulated bank, it means your money's protected up to £85,000 per person.

How does it work?

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

  • Don’t go over 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 this extra covered deposit only lasts for up to six months.

Is Monzo covered?

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

You can find out more about FSCS protection, and look us up using the FSCS’ bank and savings protection checker.

This post was updated on September 22 2020