[EnubreBense]

Yes, but instead of offsetting your own money, you take out an £85k mortgage and leave the funds sat in an offsetting account (mortgage therefore attracts no payments as it is interest only). You invest your own £85k but have an £85k cash call at less than 3% pa.

If the bank goes caput, the £85k is protected and they use whatever other deposits (assuming less than £85k) you have to repay the £85k loan. You settle the difference and walk away with what's left, that being whatever was in your other deposits (ignoring any fees).

It essentially amounts to having an £85k low-interest, colateralized overdraft.

Neat, a colleague of mine still has an old "base rate +79bps" offset mortgage running on the side. Very handy!