What is a safeguarded account? Here’s why your money deserves extra protection
When it comes to your hard-earned money, safety is everything. But with so many financial terms flying around, it’s easy to feel overwhelmed. One phrase you might not have heard before is ‘safeguarded account’. Don’t worry—it’s not as complicated as it sounds. In fact, understanding the definition of a safeguarded account is could help you make smarter decisions about where to keep your money.
Let’s break it down in simple terms and why this type of account might just be your financial superhero.
What is a safeguarded account?
Imagine you’re storing your valuables at a company. You’d want them kept in a safe, separate from the company’s everyday business activities, right? That’s exactly what a safeguarded account does for your money.
When you deposit funds into a safeguarded account—offered by certain digital financial platforms and payment services—those funds are kept in a special “vault”1. This vault is completely separate from the company’s own money. So, even if the company runs into financial trouble or shuts down, your money stays safe and sound.
Safeguarding isn’t just a good idea; it’s a legal requirement in many countries1. Companies that handle safeguarded accounts must follow strict rules and safeguarding regulations to protect your funds, so you can sleep better at night.
How is this different from traditional bank accounts?
In a traditional bank account, your money is usually mixed with the bank’s own funds. If the bank fails, your money is protected—but only up to a certain limit, thanks to government-backed insurance schemes like the UK’s FSCS (which covers up to £85,000)2.
With a safeguarded account, there’s no such limit. Whether you have £100 or £100,000, your entire balance is protected.
Why should you care about safeguarded accounts?
1. Your money stays yours
In a safeguarded account, your money is off-limits to the company for things like paying their bills or making investments. Whatever happens to the company, your money is still right there, untouched and ready for you to access.
2. No limits on protection
Unlike traditional bank accounts, which might only protect up to a certain amount, safeguarded accounts protect every penny. Got a big payday or a chunky savings pot? No problem.
3. Built for the digital age
As more of us move to digital fintech solutions, safeguarded accounts are becoming the go-to way to keep your money secure. Whether you’re transferring funds, making purchases, or simply keeping your funds for a rainy day, safeguarding gives you the best of both worlds—safety and convenience.
Why we love safeguarded accounts at nsave
At nsave, safeguarding isn’t just a buzzword; it’s a promise. We know that trust is earned, and nothing earns trust like keeping your money safe. That’s why every penny you deposit in our non-investment accounts goes into a safeguarded account. We abide by the strict safeguarding account compliance under the Electronic Money Directive3 to ensure our customers’ funds are protected. Whether you’re using nsave to shield your money from inflation, receive global payments, or spend securely with your card, you can rest easy knowing your money is in the safest hands.
In a world where financial uncertainties can pop up out of nowhere, a safeguarded account can be safety net. And at nsave, we’re here to make sure that net is as strong as it gets.
Read more about how people are turning to nsave, after having their other digital accounts deactivated.
Ready to take control of your finances with total peace of mind?
Join nsave today and experience safeguarding in action. Because your money deserves nothing less than the best protection.
Sources:
Sources last updated: 13-Feb-2025
