Don't Panic About HBOS

Fools shouldn't panic about any savings they have with Halifax or any other bank in the HBOS group.

We've had several emails from Fools asking about their savings in HBOS accounts. I've also heard that there's a queue outside at least one Halifax branch in Gloucestershire.

I strongly believe that Fools shouldn't panic. Here's why:

- If HBOS did go bust - which I still think is unlikely - savers would get their money back from the Financial Services Compensation Scheme. That's up to a maximum of £35,000 saved with the HBOS group. Please note that the £35,000 is per person, not per account. And Halifax, Bank of Scotland and Birmingham Midshires are all part of HBOS.

- If you have more than £35,000 with HBOS, you still shouldn't worry. There are two main reasons for this.

- Firstly, it looks like Lloyds TSB is going to take over HBOS. If that happens, everything should be fine.

- Secondly, even if the Lloyds deal did collapse and HBOS ran out of funding, I believe that the government would feel obliged to step in. That's what happened with Northern Rock and I strongly believe it will happen again. I guess there's a small chance I could be wrong on that, but I stress I think it's a small chance. 

We hope to publish an article later today if the Lloyds TSB/HBOS takeover does go through.