Bank of Cyprus set to come under the UK FSCS

13th June 2012

It won’t be the juiciest court hearing on the 22 June but Bank of Cyprus UK savers should make a note.

Amid mounting concerns about the state of Europe’s banks, the British bit of Bank of Cyprus wants to switch from the Cypriot depositor protection scheme to the UK Financial Service Compensation Scheme (or FSCS as its known). 

The Financial Services Authority thinks that is a good idea.  It has agreed the move in principle.

All going well, the transfer to UK authorisation will take place on or after the 25th June. 

Banking and savings products will continue as normal - there’s no need to get a new card or pass book, nor set up standing orders or direct debits again.

There are growing doubts whether Cyprus would be able to find the money if its banking sector went into meltdown. 

The influx of deposits from worried Greek savers has left the tiny island of Cyprus with a big, wobbly and very much outsize problem if anything bad were to happen.

Thankfully, Bank of Cyprus UK says everything is tip top at its four branches.  The business is profitable and well-funded. 

Savings rates aren’t too shabby either. 

We like the idea behind its flexibond which allows up to two withdrawals during its one year term.

New customers get 3.10% APR and, in a super nice touch you don’t see often enough, existing customers get a better rate - at 3.40% for the same product.

Existing customers looking for fixed rate ISAs are treated equally well.  

They get an extra 0.55% on two year and three year bonds.  There’s an additional 0.50% for existing customers opting for the bank’s one year ISA deal.

Coming under the UK compensation scheme will also be a boost. 

The FSCS pays out up to £85,000 per person per banking licence.  The Cypriot scheme promises €100,000 - which at today’s rate is just over the £80,000 mark.

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