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After bank collapses, bail-outs,  the recession and the small matter of global market turmoil it’s no wonder we’re all still worried about the safety of our money. Despite all the problems the global and European economies are experiencing, there are steps you can take to protect your hard-earned cash.

See how you can become a Moneymagpie Saver with these golden rules for making your money safe.

• Protect yourself from crashes
• Put your money in the safest place
• Think long-term
• Find alternatives to banks
• Beat inflation

Rule 1: Never save more than £85,000 in any one financial institution at a time.

At the moment, the Financial Services Compensation Scheme (FSCS) covers up to £85,000 of your savings for each financial institution. So if you only have up to £85,000 in one bank at one time, even if the bank goes bust, you will get your money back. You just might have to wait a while to get it.

However, any amounts above £85,000 (£170,000 for joint accounts) will be lost. Which means you need to spread your investments.

Don’t be caught out – if two banks function under the same banking license you are only protected for up to £85,000 between the two institutions.

So for example, you may think that Halifax and Bank of Scotland are two separate banks. But they are actually both part of the HBOS group and function under one banking license. So the Financial Services Compensation Scheme would only cover £85,000 across the two banks.

This isn’t always the case. Both Alliance & Leicester and Abbey are now part of the Santander group. However, Santander are keeping them apart, under separate banking licenses. This means the Financial Services Compensation Scheme would cover £85,000 for each institution and not the two combined.

It is often quite complex working out which organisations come under the same banking license so to make sure you’re not going over your allowance, have a look at moneyfacts.co.uk to see who owns what!

Rule 2: The safest investments are government-owned.

We bailed them out at the height of the recession, making them state-owned and at the same time ironically making them one of the safest places to put your money. Obviously government backed institutions are very, very unlikely to fail, as it would take the government going bankrupt for them to be in trouble.

So your money is pretty much as safe as it can be in one of these banks, but remember that doesn’t necessarily mean they offer the best interest rates, so you have to weigh up the importance of peace of mind versus a good return on your savings.

A banks that is ultra-safe is therefore National Savings & Investments  – which is wholly government-owned. RBS is also partly government-owned.

Government Bonds (called ‘Gilts’) are also very safe. But, for the comfort of knowing your money is safe, you will have to take an interest rate cut. In fact these institutions are now actually trying to put investors off by lowering their own rates. So you won’t get the best deal, but you will have peace of mind. Read our article for more information on how to invest in Gilts.

Rule 3: Think long term when it comes to the stock market.

The stock market is highly volatile. Of course the markets are particularly edgy at the moment because of the financial problems in the Eurozone and around the world, but even in good times they go up and down.  Which is why, if you want to get a good return from stock market investments, you need to be in it for the long haul.

Over a long period of time the stock market moves on a general upward trend. So even if the market fluctuates in the short-term, over the long-term you will see a much better annual return on your money than from cash savings.

Rule 4: Remember to consider savings alternatives

Putting your hard-earned cash in a conventional savings account at your bank is not your only option. You could also consider:

• Credit Unions

These are local savings institutions which are run for different communities – for instance for those living in the same area, or for those with a particular job (like the Police Credit Union), or part of a trade union.

Because they are non-profit organisations – i.e. there are no third-party shareholders making money from the organisation – they are mutually beneficial for all their members, often offering competitive borrowing and savings rates and making them arguably less risky than banks. And if you save with a credit union, you are directly helping someone else who needs to borrow money.

• Zopa

Zopa is an online ‘social lending’ service – essentially it cuts out the middle-man, that is the banks – by letting people borrow and lend to and from one another at a rate they agree.

What this means is that savers get a better return on their investments than with a conventional savings account, and those borrwing money are able to do some more cheaply than they could with a bank.

As a saver you can offer to lend your money out at a rate you choose, and you can also select the type of people you lend to. Zopa categorises it’s borrowers by credit rating, so you can decide how much risk you want to take on – those with a better rating are obviously less risky, but also demand the best rates, so won’t make you as much money as a more risky borrower.

You can also spread the risk by spreading your money in smaller chunks across several different lenders.

Read more about Zopa in our article here.

Rule 5: Make sure you are beating inflation

This is easier said than done at the moment, as inflation is sky high. What that means is that if you save money in account which offers a rate of interest lower than that of inflation (currently 5%) – which unfortunately is almost all of them at the moment – over time your savings are being eroded and the purchasing power of your money is decreasing.

There are a few options to consider however. As mentioned above Zopa often beats conventional banks savings rates, and promises lenders an average annual return of 6.4%.

There are also inflation-linked bonds, whose interest rates change in line with inflation. You can find out more about those here. Corporate bonds are also a good option – see our full article on them here.