Nationwide Building Society

[glojo]

Have any of our financial whizz kids any observations to make regarding Nationwide?

I have been asked to consider placing a largish sum of money into a two year bond with this building society and I'm loath to act in haste (I'm a trustee for a fourteen year old child)

Any advice will be appreciated.

Regards
John

 

[Chattonmill]

As long as it is under £50k you should be fine as it will be covered by the Gvt Guarantee anyway. so the most you are likely to lose in the event of a problem is some interest.

 

[verytalldave]

The largest "real" Building Society. Its safer than almost anywhere else because they retained at least a modicum of sense in the past with their loans and interest rates when others were being silly.
I and my younger daughter both have our relative mortgages with them and I have a little nestegg with them as well.
Its certainly a fairly safe haven when compared to some I could name.
Another place worthy of investigation is the HSBC.

 

[Dryce]

Have any of our financial whizz kids any observations to make regarding Nationwide?

I have been asked to consider placing a largish sum of money into a two year bond with this building society and I'm loath to act in haste (I'm a trustee for a fourteen year old child)

Any advice will be appreciated.

Is this a straightforward savings bond or something that is tied in with the stock market or a third party? If the former then should be OK. If latter you really need to check the small print as it may not be covered under the Society's own guarantee.

 

[Dieselman]

The largest "real" Building Society. Its safer than almost anywhere else because they retained at least a modicum of sense in the past with their loans and interest rates when others were being silly.

Its certainly a fairly safe haven when compared to some I could name.
Another place worthy of investigation is the HSBC.

Agreed.
I take it you mean HSBC are somewhere to place funds as opposed to somewhere to avoid.? If so I think you are right as they are not as exposed in Europe and the US as some others. They also have an attractive bond on offer, but just at the moment instant access seems very attractive to me even at slightly lower rates.

Are you aware of any further banks to avoid.?

 

[verytalldave]

Agreed.
I take it you mean HSBC are somewhere to place funds as opposed to somewhere to avoid.? If so I think you are right as they are not as exposed in Europe and the US as some others. They also have an attractive bond on offer, but just at the moment instant access seems very attractive to me even at slightly lower rates.

Are you aware of any further banks to avoid.?

Correct. Its somewhere worthy of consideration.

Places to avoid?

I dont wish to start a panic but a few names have cropped up in the news which I would not consider placing my money.
No names, no pack drill...........

 

[manalishi]

"The Society is not under any capital pressure and already has a tier one capital ratio of 9.7% as at 4 April 2008 coupled with a high quality balance sheet." - Nationwide's reaction to today's news.

At about the same period, other banks were at 4-7%. see http://www.guardian.co.uk/business/2008/may/02/lloydstsbgroup.barclaysbusiness

As someone above said - Nationwide is a true building society. Its shareholders are its customers. FWIW, I have pretty much all my eggs in its basket.

 

[Deleted member 6183]

£50k or uden and you'll be protected, I'm not sure how you will stand if you have also money in Portman - now part of Nationwide or Derbyshire or Cheshire - yet to complete a merger with Nationwide.

Although they are a building society, the UK's largest, they are of a size to have been accused of acting more like a plc. They are not immune to riskier lending via companies such as UCB and The mortgage Works.

Personally I would not exceed the £50k limit with any company.

No disrespect to those affected by the likes of the Iclandic banks but I have failed to resist a wry smirk at the current situation. I can recall several years ago savers shunning our institutions for the so-called forward thinking foreign banks, and at times being quite aggressive about their power to take their savings overseas. The same goes for those, particulary, American lenders who were going to show us Brits how to go about mortgage lending a few years ago - where are they now?

Why not speak to your local building society managers and find the best rates and keep under £50k per person per company?

 

[WLeg]

We've got a considerable amount in a fixed 24 month bond with them (started 10 months ago). They seem to be fairly safe, as the are not big lenders....

At least, I hope so.

 

[philiggy]

Have you looked at National savings products, they are as safe as it gets and sometimes overlooked.

Phil

 

[Roger Jones]

At £180 billion, Nationwide's assets are more than those of all the rest of the remaining building societies put together. There is some comfort in that, and their very constitution leans them away from pass-the-parcel -- "But we don't understand what's in it" -- funding nonsense.

http://www.bsa.org.uk/keystats/buildingsocietysector.htm

 

[st4]

Have you looked at National savings products, they are as safe as it gets and sometimes overlooked.

Phil

Probably a very good sensible investment for a trustee of a 14yr child. HSBC have been out of the spotlight as of late, but were one of the 1st to come clean re losses and write downs.

Banks to avoid, where to start....

 

[Corrado]

With the UK govt bail-out of Icesave for all UK retail savers (for savings above £50K too) could any UK-based savings accounts now be at risk?

The £50K limit has been blown out of the water within a couple of days of its introduction.

 

[Dieselman]

Makes even more of a mockery of complaining of Ireland covering their investors money.

It's strange to see it done for an offshore bank, but presumably it's to restore faith in banks under UK rules.

Keeps the money coming in..

Apprarently the £50k limit covers 98% of all depositers, so not many additional benefit really.

 

[glojo]

Is this a straightforward savings bond or something that is tied in with the stock market or a third party? If the former then should be OK. If latter you really need to check the small print as it may not be covered under the Society's own guarantee.

I am the trustee of a large sum of cash. I have sought the advice of an Independant Financial Consultant but I never take anyone at face value and when he mentioned 'building society' I cringed.

I have a responsibility to ensure the capital is safe and this must be the over riding factor, I must confess to be leaning towards Government Bonds but the above posts have all been reassuring.

Thanks very much

Yours sincerely
John

 

[crockers]

The reasons that the Abbey / Halifax / BBB / A & L / Woolwich all gave up mutual Building Society status was so that they could raise monies on the "open market" (i.e. act like a bank) which the Building Society rules don't allow. They gave their reasons as being - competitive, modern, growth,

What has happened is that they have over extended themselves - forgotten their roots and now will slowly fade away as they get gobbled up dissolved etc.

Nationwide has refused to go down this route - and have maintained true Building Society roots and ethics. I would say your money is safer with them that most others -- but if you want 100% security you are restricted to Northern Rock or N.S. & I. - unless you want to venture to foreign banks. Its all well rushing off to Irish banks - but if the "doomsday scenario" happened can the Irish Govt uphold their guarantee.. Or will Russia bail them out too...(joking..I think..)

 

[Smiley]

I am the trustee of a large sum of cash. I have sought the advice of an Independant Financial Consultant but I never take anyone at face value and when he mentioned 'building society' I cringed.

I have a responsibility to ensure the capital is safe and this must be the over riding factor, I must confess to be leaning towards Government Bonds but the above posts have all been reassuring.

Thanks very much

Yours sincerely
John

The capital value of Govt bonds rises and falls against interest rates - the lower the current rate then the higher the value of the bond - so if primary objective is zero risk with the capital then it means cash deposit only.
Shame as if it is for a 14yr old then time is on his/her side and the fund should be drip fed into investments such as stocks and shares (and not just UK but overseas inc China, India LATAM etc) and gilts over time. Right now a proportion in gold would seem like a sensible bet and cash looks good but over a long time horizon cash only gets eroded by inflation. trouble with cash is that it always gets eroded over the long term by inflation.

 

[glojo]

The capital value of Govt bonds rises and falls against interest rates - the lower the current rate then the higher the value of the bond - so if primary objective is zero risk with the capital then it means cash deposit only.
Shame as if it is for a 14yr old then time is on his/her side and the fund should be drip fed into investments such as stocks and shares (and not just UK but overseas inc China, India LATAM etc) and gilts over time. Right now a proportion in gold would seem like a sensible bet and cash looks good but over a long time horizon cash only gets eroded by inflation. trouble with cash is that it always gets eroded over the long term by inflation.

I understand what your saying but in all good conscience, I cannot and will not take any risks with this money.

I have been given this responsibility until the child reaches their eighteenth birthday and whilst it would be nice to make a profit with the money; my only concern is to make sure it is there on that day. No doubt in four years time they will be saying why didn't I do 'X' or 'Y' but that is life, I just want to sleep at night knowing I haven't been reckless with it and at the moment buying shares might not be a wise move.

Going wayyyyy off topic
A few years ago I bought a few thousand Spurs shares at 50 pence each. I just checked and they are way over a £1 a share (123.5p) but I don 't think this child's parents would appreciate it if I started playing the stock market

Regards
John

 

[carnut]

I understand what your saying but in all good conscience, I cannot and will not take any risks with this money.

I have been given this responsibility until the child reaches their eighteenth birthday and whilst it would be nice to make a profit with the money; my only concern is to make sure it is there on that day. No doubt in four years time they will be saying why didn't I do 'X' or 'Y' but that is life, I just want to sleep at night knowing I haven't been reckless with it and at the moment buying shares might not be a wise move.

Going wayyyyy off topic
A few years ago I bought a few thousand Spurs shares at 50 pence each. I just checked and they are way over a £1 a share (123.5p) but I don 't think this child's parents would appreciate it if I started playing the stock market

Regards
John

Work out the actual monetery difference between the interest with Nationwide and that with Govt Bonds for the amount you have to invest...is the risk worth the difference?

I agree john, your job is prudency at this time,not speculation or the highest profit. As for gold..well its at an all time high so guess where that will go in the future

 

[WLeg]

You're probably right....but buying a few now/next few months might not be a bad idea - the market is pretty low right now, and should recover over the next 4 years.