My question to anone who can answer it please is, just of late all we hear about is banks going under, or basically running out of money, does this apply to building societies or do they finance solely their members deposits. also how safe are building societies as this is my form of saving.

Firstly building societies are covered by the same depositor guarantee scheme as banks.

Secondly, building societies are subject to stricter lending and borrowing rules than banks. They are also not exposed to the same overseas operations as banks and they don't have the same shareholder pressures that banks have.

In my view, a random building society is a much safer place to keep money than a random bank although I am sure that there may well be an odd, small building society that has been rasher with their lending than they should have been.

Can anyone confirm if 1 to 5 year bonds are treated as savings for the purposes of the new £50,000 safety net?

trixietrossel: if you are talking about the fixed term deposits that banks & buidling societies sometimes call bonds (as opposed to government bonds, corporate bonds, equity bonds, etc), then yes.

robwin123: maxsteam is generally right, but all generalisations are suspended in this climate! I'd hardly call the Nationwide an odd, small building society (they are, in fact, the biggest) and yet they are on the government's recapitalisation list. See this FT article: www.ft.com/cms/s/0/decd5e02-950b-11dd-aedd-000077b07658.html

The FSA is also waiving the usual rules so the Nationwide can quickly merge with the Derbyshire and the Cheshire, as both of those are facing difficulties. See www.ft.com/cms/s/0/1d66b916-7d82-11dd-bdbd-000077b07658.html

The safest places for deposits are NS&I and (now!) Northern Rock -- both are owned by the government (anyone worried that the government, and hence the country, might go bust should invest in 10 years of rice and dried beans, and a shotgun! :-)

In reality, what we've observed so far is that the government will do everything it can to protect all retail deposits in UK banks & building societies, either by nationalisation (Northern Rock) or by facilitating rescues (HBOS, Bradford & Bingley, Kaupthing Singer & Friedlander, Heritable) or, in the case of UK branches of foreign banks (Icesave) by neo-gunboat diplomacy and brute legislative force!

mc2 - brut 'gunboat' force is something that the Icelandic people know all about. And when their government says that it will protect its own citizens over foreign depositors, despite what the law says, then our government is correct in its actions to consolidate Icelandic funds in this country.

I wasn't knocking it :-)