Got the email telling us the process.... for most through Icesaves website using our usernames and passwords to our nominated account. Very relieved at what appears to be very efficient... now I am not sure what to do about my 3 year bond!
In message , BigGirlsBlouse writes
What's the interest rate? A one year bond was 6.7%, so a 3-year is probably a bit more. You have the option of leaving your money in until the 3 years are up. As interest rates are falling, by the time you get your bond money back (with interest up to 7 Oct), will you still be able to get such a good rate elsewhere? Also, from how I read the email, Icesavers are definitely promised all of their money regardless of the
50k limit. So even if you have over 50k in Icesave, it is certainly worth considering just leaving your money where it is. But, of course, a bird in the hand etc etc...
I had a two-year bond with Icesave, with interest paid monthly. If I understand it correctly, if I choose not to withdraw the money now then I will receive no further monthly interest payments. All interest further due will be paid only upon the bond's maturity late next year.
Also, the "electronic" refund option that is now being offered will not be available when the bond matures. Depositors who leave there money there will have to make a paper-based claim to get their refunds.
Chris
I've e-mailed FSCS with a couple of questions about exactly how this is going to work.
- it's not crystal clear that they'll be doing the compounding in the same way that Icesave would have. If you've got more than a few compounding dates (e.g. monthly on a 3 year bond), you'd be badly screwed if FSCS just calculated simple interest instead.
- it's fairly clear, I guess, that online access isn't going to persist for 3 years - that's what I read into the absence of an 'electronic payment option' when a bond reaches maturity. I've asked whether they'll therefore be sending out paper statements each year for those who need them.
- the announcements have been remarkably silent about tax. Since FSCS isn't a bank, and strictly speaking will be paying 'compensation' rather than 'interest', I've yet to understand whether they can, or may be obliged to, make gross payments. Or, if they do deduct at source, whether they're going to generate annual Section 352 certificates for those who need them.
My bond had started in september for 3 years at 7.06%... the bit I focussed on in the email was and I copy here; On the other hand, if you prefer to wait until the end of the fixed term, and receive interest which would have been due at maturity, .....
The important bit is receive interest "which would have been due at maturity" suggests that it would have been that from Icesave had they continued in business.....I hope!
You're probably right, and I'm probably being too cautious. I just feel there may be a veiled threat in the words "you will not be paid any interest prior to maturity". With sufficient cynicism that could be taken to mean no interest will be added to balances on compounding dates - so I've asked them to clarify.
As has been pointed out in another thread, the politicos and FSCS themselves are being a bit disingenuous in claiming 'no loss' for punters who are actually giving away interest on the variable rate account from 8/10 to whenever they win the raffle for the refund date. I have no hangups about the idea of being less than fully compensated, but the slight lack of transparency, and the unfairness of the raffle, are a bit irritating.
FSCS has yet to earn my entire trust :-)
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