In the money world, the month of October has been a rather exciting month to put it mildly! World markets have nose-dived and as a result banks have seen their share prices plummet with tax payers' money been spent left right and centre to bail out big bank bosses who have been blazey with our savings and deposits over the past year or two!
This whole series of events has resulted in an unprecedented volatile money market where a lot of money can be made as well as lost if you brave enough! This is all because these are the most uncertain times our banks have faced in a very long while. We have already seen the collapse of Icelanding bank Icesave and their response was to suspend all withdrawals on savings and deposits with immediate affect which has resulted in a somewhat turbulent political situation!!
But I have my own little story to tell as a result of all of this which seems to get more interesting by the second! It all started after the above mentioned issue with Icesave, the Icelanding Bank. Only a couple of days ago I checked the status of the bank who I have savings with, Kaupthing Edge, another Icelandic bank (but until a second ago I thought it was Danish - see correction at bottom of post), and on their website they had a message along the lines of "don't worry, we are OK, your savings are fine" so I thought cool, sounds good to me.
Anyway, in light of the political situation with Iceland today I thought, "Hmm, Kaupthing Edge are danish, I wonder if the Iceland thing is having an affect on them, despite what they said, so I logged onto their website and hey, I am greeted with the message along the lines of "Hi, don't worry, everything is OK, we have just been bought out by dutch owned ING direct"!!! After a bit of research into news articles (See: Rescue plan for Kaupthing savers) I uncovered that on the 8th October 2008 (yesterday), Kaupthing Edge had gone into administration and that the FSA of the UK had rushed through a decision to allow ING to buy out their savings assets!!!! Thanks for telling me Kaupthing Edge!! Anyway, because they are now owned by ING, who are secure (ha where have we heard that before), I have no need to make a claim to Alastair Sweetheart for compensation of my savings, as everything was the same except the company that I had the savings with. I had suddenly become a customer of ING direct without knowing! Madness...!
Anyway, having thought about the issues these foreign banks have had in recent days, even though my money was safe with dutch owned ING Direct, I wasn't happy that my money was still with a non-UK bank.... I thought perhaps I should bring my money back to the UK, at least while we weather this financial storm at perhaps the loss of a percent or two on interest rates.... So I did, and so I thought, hmmm, which UK banks should I bring my money to? And suddenly the answer hit me: durr you have just bought shares in RBS which owns Natwest! Any money Natwest gets will help my share price! So the answer was inevitably going to be Natwest! Now obviously my mediocre savings won't have any affect in the slightest in the grand scheme of things but in the word of Tesco: "Every little helps!"
So the next thing I do is head over to Natwest website to see what their current interest rate is.... 6.50% for the first 12 months!! I am thinking that's a great price! It is even more than I was getting at Kaupthing! How can this be? Then after the shock of that I had a second epiphany: and that was... these banks are all struggling so much of course they are going to give us really juicy savings incentives in order for us to give them our money (in the form of savings or deposits)! That must explain the higher interest rate as it certainly wasn't that price when I opened Kaupthing back in July!
To test my theory, I went over to the other large UK bank that is also struggling quite badly: Halifax, to check their rate.... Whaaat! 7% for the first 6 months!!!! Of course they are going to do this "for the first X months" just like Natwest cause they are hoping that after this time, everything will have settled down and they can go back to their usual lame rates for savings! "Hope" being the operative word there! Even though Natwest's rate was slightly lower than Halifax, I opted to put my savings in Natwest cause I would help support my share prices rather than my rivals' as I guess that's how I should see the likes of Barclays, Lloyds and Halifax now!
And so it was, I took steps to rejig my savings and dump them all in a nice "safe" UK bank where Alastair and Gordon between them will look after them, applying monetary plasters to their wounds and nurture them through this financial frenzy so that they come out relatively unscathed at the other side whenever that will be.... hopefully.... It's a triple bonus doing this as 1. the interest rate is higher for the 12 months, 2. I am helping support my share price and 3. it's all safe and back inside the UK where it started - never mind these risky foreign banks (no offence ;))
Phew! I am exhaused after writing all that! I apologise now for all the typos in the above text as adrenaline is still pumping quite profusely after all this whirlwind with what started as an innocent check on savings about an hour ago!! It's exciting times and I feel that money is defintely there to be made if we all review our finances right now (especially in terms of savings and investments) because the banks are fighting with each other desperately in order to get our money to help keep their heads above water.... And that process of fighting is seeing some superb savings rates!!
* breathes *
Correction: I have just discovered that Kaupthing is actually Icelandic... God knows why I had thought it was Danish! What a potentially very costly error! How true the phrase "We live and learn". Well that explains a lot.... Oh and I have just stumbled across this rather headliney BBC news article: http://news.bbc.co.uk/1/hi/business/7661987.stm - All this it seems has been happening over the past couple of days. I can't get that money out of there fast enough!