Are my savings safe?

Yes. Last night the Government pledged to underwrite all deposits in Northern Rock. So your money is safe.

I am still determined to withdraw my cash. Where should I put it?

The best-paying instant access account is Manchester Building Society’s Premier Postal account, offering 6.26 per cent on deposits of more than £1,000. The Post Office offers the most favourable returns on a branch-based account. Its Instant Saver account, which is operated through 14,000 Post Offices branches in the UK, pays 6 per cent interest balances of more than £500. Alternatively Anglo—Irish Bank is pays 6.9 per cent on its one year bond. If you withdraw your money before the end date, you will forfeit some interest. Birmingham Midshires pays 6.91 per cent on its one year bond.

Does this mean Northern Rock's troubles are over?

Not exactly. The lender still has a credit problem because it relies so heavily on the markets to raise funds. Banks are reluctant to lend to each other, giving the bank a major cash-flow issue. But the Bank of England has pledged to extend credit to the bank to help it through this problem.

Why does Northern Rock need a loan from the Bank of England?

The bank, which has 1.5 million savers and lends to 800,000 homeowners, is different from many other mortgage lenders who fund their lending to homeowners by using the savings they recieve from other customers. Northern Rock raises a large proportion of the money it lends by bundling up its loans and selling them on the market.

Why is it struggling to get money?

This is all a knock-on effect of what happened in the America. Borrowers who had troubled credit histories were given loans that they simply couldn't afford. Hundreds of thousands of them started to default on these sub-prime loans. This sent shock-waves through the financial markets as many institutions had bought 'parcels' of these loans from the lenders.

But Northern Rock isn't a sub-prime lender, is it?

No, the bank mostly lends to 'prime' customers - those who have few blemishes on their credit record.

So why does this affect Northern Rock?

In two ways. Firstly, it says it has £75 million in direct exposure to these sub-prime deals and £200 million which is indirectly exposed to the turmoil in America.

Secondly and more importantly for Northern Rock, institutions have become increasingly wary of lending to any mortgage lenders in the climate fostered after the initial shockwaves of August 9 when the US sub-prime 'slime' became apparent. This has made it nigh on impossible for NR to get funding, hence its appeal to the BoE.

Do other lenders have the same kind of structure as Northern Rock?

Northern Rock is unique in the way it depends on the markets for funding. But some other lenders dp depend on the credit markets to some extent for funding.

What about my mortgage?

Homeowners should not be overly concerned. At present, everything will continue as normal. If Northern Rock does get into trouble, the likliehood is that another lender will take on its mortgage book. Some brokers are still recommending some Northern Rock home loans.

What about my personal loan?

Much like mortgages, they are unaffected at present, and even if the bank did get into trouble, they would likely continue as usual.

What about my windfall shares?

Northern Rock customers received windfall shares when the Building Society demutualised ten years ago. Around 176,000 private investors currently have shares in the company. The shares plummeted on Friday and yesterday, but recovered slightly this morning.