Customers still wary of putting savings into the Rock
March 4, 2008
A recent report has suggested that some savers are still worried about putting their savings into Northern Rock, despite the safety net of the bank passing into public ownership and despite the various tempting deals on interest rates that the Rock is offering to try and entice customers back. Northern Rock hit problems last year after it had to take an emergency loan from the Bank of England. It became the victim of the first run on a British bank in 150 years, with savers withdrawing over £2 billion in savings within the space of a few days.
The ailing bank then entered into talks over a private sale, but after many months and no success the government announce that the bank was to be nationalised on a temporary basis, and in the last couple of weeks it passed into public ownership. As a result of the Northern Rock incident savers will see their savings now guaranteed by the government for up to £35,000. With the Rock now nationalised many are stating that it has become one of the safest places to stash the cash.
However, many people are still wary after the bank’s crisis last year, and despite the tempting rates of interest are reluctant to put their money into an account with Northern Rock. One consumer stated: ‘The savings rates look good. But I won’t invest with Northern Rock. I’m mildly worried. It might be illogical but I’m still uncertain about Northern Rock. It could be that I don’t really trust the Government and Alistair Darling.’
One financial researcher said: ‘The wounds of those affected by the Northern Rock crisis – all those that spent days and weeks fretting over whether they still had any savings left – are still pretty fresh, and it is going to take some time to rebuild trust in Northern Rock, even if it has been nationalised.’
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