The Bank of England is to boost protection of bank deposits to £1m, for people who have a short-term jump in their account balance because they have sold a house or received compensation or an inheritance.
The proposal, which would come into force by July next year, would mean that the normal guarantee covering £85,000 of a bank account balance would be raised temporarily for a period of 6 months.
The Bank of England's Prudential Regulation Authority is bringing in the new rule to comply with a a European directive.
The PRA is also planning to create a "seamless" process of transferring accounts from a failed bank to a new account provider, so that customers will be able to use them as normal within 24 hours.
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