How safe is money in the bank?

Question

I live in the UK and through inheritance I have acquired a large amount of money (over 200K).

I will be soon investing this money in property. But while all the conveyancing process is going on it will have to stay in my current account. I am worried about how safe this is. I'm specifically worried about cybercrime. I do hear in the media that the threat of cybercrime in a bank is particularly high. A situation could occur where I cannot access my funds electronically.

Is storing this money in the bank my only option? I will have to release it to my solicitor once the property purchase completes, but this could be months away.

Answer 1

I do hear in the media that the threat of cybercrime in a bank is particularly high.

The media says all sorts of things. The biggest risk is you. For those few months, don't believe anyone calling you and saying that they are from your bank. Don't believe anyone who says you need to transfer your funds out. If you get an email from your solicitor telling you to use a different account for funds transfer, don't believe it - contact the solicitor by another means to check.

A situation could occur where I cannot access my funds electronically.

If you're worried about hacking, then that's a good thing!

Answer 2

Not addressing cybercrime, but thinking of other "safety" issues.

Your money is safe in just your current account for a period of 6 months, as a Temporary High Balance.

However, after those 6 months you should be aware that only the first £85,000 (for an individual account) or £170,000 (for a joint account) would be covered under the fscs cover scheme.

The risk of a bank failing is quite small but since the amount you've specified is higher than that amount, then you might want to consider splitting the money into separate accounts at different banks.

Answer 3

The risk for giving hackers access to your bank account is quite low if you follow these rules:

1. Your banks fraud department doesn't call you. (I actually asked Barclay's fraud department after a reasonably clever attempt, how I can distinguish between a real call and a scam. Their answer: It's a scam. We don't call you). If you get a call from your banks fraud department, it's a scam.

2. Your bank never ever needs your passcodes, PIN numbers etc. They are the bank. They can get at everything without your help. So if anyone asks you for this information, it's a scam.

3. Your bank never asks you to move money into another account to make it safe. They are the bank. They can block your account at any time. Or create a new account for you and move your money, if they wanted to, but there is no reason. If anyone asks you to move your money it is a scam.

4. Calling your bank: To make sure you are actually calling the bank, hang up the phone, call someone you know personally and talk to them, hang up, then call the bank using a published number (for example on the back of your bank card). Scammers can pretend that their calls come from your bank. They can also keep a call running when you hang up. That's why you call someone else (and talk to them), so the scammer's call is definitely hung up, and then you call a published number, so you will talk to the bank.

Answer 4

There is a risk that the bank that holds your funds suffers a major IT systems failure. If that happens, you might be unable to send or receive any funds, and if it went on for long enough, it is possible that your property deal would fall through.

I am in a similar situation and this is the risk that scares me the most, because I have absolutely no control over it. I have not been able to find any recent statistics but this gives you some idea of the scale of the issue as of a few years ago:

https://www.theguardian.com/money/2019/mar/04/uk-banks-hit-daily-by-it-failures-halting-payments-says-which