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Understanding FSCS protection

‘FSCS’ (Financial Services Compensation Scheme) is the ‘GBBO’ (Great British Bake Off) of the banking world. In other words, a term thrown around by people that look after dough. 

And much like baking, we’ll be the first to admit that banking can also come out a little dry. But we promise you that knowing your FTSE from your FSCS will help you in the long run – and who knows, there’s a 0000.1% chance it could come up at the next pub quiz. We’ll give you the 101 on what it means for your personal finances.

What does FSCS mean?

FSCS stands for Financial Services Compensation Scheme (hence why we like to shorten it for your tiny devices). 

It’s an independent scheme that’s designed to help keep your money safe if your bank or building society goes bankrupt. If this happened, the FSCS would help you understand what you need to do to access your money. Usually you don’t have to do anything – they’ll refund you your money in 7 days (more on that below). 

How FSCS protection works

If a bank or financial firm goes out of business and can’t pay back your money, the scheme steps in to pay you instead. You usually don’t need to do anything if this happens – the FSCS will automatically repay you within 7 days. But if that’s not the case, you can trigger a claim directly through their official website. 

As of 1 December 2025, the FSCS increased its cover to £120,000 per person to keep pace with inflation. This is up from the previous limit of £85,000. 

The scheme is completely independent from your bank or building society and free for anyone to access. But not all financial companies are covered by it.

Checking if your bank’s covered

The best way to check if your bank’s covered is by using the tool on the FSCS website. 

If a bank or financial firm is part of the FSCS, it will typically show the official logo on its website and other marketing materials too.

Is Monzo covered by the FSCS? 

Yes! Your money’s protected in Monzo. We’re a bank that’s authorised by the Prudential Regulation Authority and regulated by the Prudential Regulation Authority and Financial Conduct Authority. Which in simple terms means that your money in Monzo is  protected by the FSCS.

What types of accounts are covered?

The FSCS protects money held in:

  • Current accounts

  • Joint accounts

  • Investment accounts (e.g. Stocks & Shares ISAs)

  • Cash ISAs (including Lifetime and Help to Buy ISAs)

  • Investments and cash saved in a SIPP (Self Invested Personal Pension)

Insurance products are also covered if the provider is part of the scheme and regulated by the Prudential Regulation Authority (PRA). There’s a bit of nuance when it comes to those products so it’s best to check the FSCS website directly, as it’ll have the most up-to-date information. 

What FSCS doesn’t cover

  • Investments losses – the FSCS only repays money you lost from a financial firm failing; not any investment losses you may make from dips in performance

  • Cryptocurrencies 

  • Insurance policies (although there is some protection for insurance claims)

  • E-money accounts (like PayPal)

How does the £120,000 limit work?

The £120,000 limit is per person, per firm. Let’s look at a few examples of how the maximum limit works and how it could impact your choices. 

First things first, the fundamentals: if you’ve got more than £120,000 held with a registered bank, anything above this figure won’t be protected. So if you’ve got £150,000 saved in one bank, and that bank failed and was unable to pay you back, the FSCS would repay you £120,000 and you’d lose £30,000.

It’s worth noting that it doesn’t matter if that £150,000 is split between your current account and savings account. It’s the total amount you have with one bank that matters, not where it’s held.

What about joint and kids accounts?

For joint accounts, the £120,000 limit applies per account holder. So a joint account with two holders can have up to £240,000 protected (£120,000 per person).

For kids accounts, it depends on who the account holder is. If the child is the account holder, they’ll get their own allowance. If the parent is the account holder – like Monzo Under 16s – then the balance in the kids account will count towards the parent’s £120,000 personal allowance. 

Let’s look at some examples

Money in Monzo accounts

You’ve just opened your first Instant Access Savings Pot and you’re raring to go. You’re saving every time you spend with roundups and seeing your Pot get fuller. Some hardcore budgeting and one tax rebate later and you’ve got £6,000 in there.

The following week it’s payday, bringing your current account balance to £4,150.

You and your partner add £300 each into your joint account every month to cover bills and ‘the big shops’. You didn’t spend all of your joint account budget last month, so with your new funds added you’ve got a total of £750.

Across all of your Monzo accounts you’ve now got £10,900 (£6,000 + £4,150 + £750).

As you share the joint account, only 50% of that £750 counts towards your FSCS personal limit. Your personal total is therefore £10,525 (£6,000 + £4,150 + £375).

That means if something happened to Monzo, you’d get all of your money back as you’re well within the £120,000 per-person FSCS deposit protection limit (across your eligible Monzo accounts).

Money in other regulated banks 

Remember, the FSCS protection covers an £120,000 allowance per PRA-authorised firm, so it can be a good idea to spread your money across different banks to increase your overall protection. That means if you’ve maxed out your £120,000 limit for one bank you might want to consider putting a chunk of money in another. Imagine you’ve got £60,000 in investments at Monzo, £35,000 saved in your building society and a Lifetime ISA with £40,000 for your first home. The total amount you have is over the £120,000 limit, but because the money is spread across different places you’d get the full amount back from each firm should something happen.

Good to know

When thinking about where to hold your money it’s worth knowing that a PRA-authorised firm may own multiple brands. For example, HSBC and First Direct are part of the same banking group, so the £120,000 per person limit is spread across both brands rather than £120,000 per bank. You can check which firms are registered and share a licence using the Financial Conduct Authority’s firm checker tool.  

From joint accounts, to accounts for kids, to accounts with worldwide travel insurance – choose something that works for you. Explore our range of current accounts today. UK residents only. Individual product Ts&Cs apply.