Unfair interest payments with Icesave compensation.

I note from the first e-mail from the FSCS that Icesave savers will be able to transfer their cash into their linked accounts very soon.

Savers will be paid interest up to the date that Landsbanki went into administration (10th October). This means that the majority will lose at least one month's interest on their money.

Icesave savers who have fixed term accounts, however, can leave their money with Icesave until the maturity date and will then be paid full interest right up to that date. They will not lose any interest at all. This seems a little unfair!

Ret.

Reply to
Ret.
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Do you want jam on it also?

Reply to
Yellow

There is absolutely no way i am going to leave a penny with Ice save. Far too risky.

Reply to
mick

You have a government guaranteed bond at Icelandic rates. Sounds like a pretty good deal to me.

Reply to
Jonathan Bryce

so I WILL get my 100K back in full but loose 250 interest.................my heel clicks would be heard a mile away.

Reply to
(!)

Well, yes, I suppose I ought to be grateful that I'm getting anything back!!

Ret.

Reply to
Ret.

My thoughts precisely.... as long as theres no catch with the rates..it just sounds too good to be true at 7.06% for me.

Reply to
BigGirlsBlouse

But they will have to fill in paper forms and wait 4 to 6 weeks for their money, at least this is what I have been told.

There is however an interesting issue, what would happen if Icesave had offered 1000% p.a. interest the day before it went under, would the FSCS still be obliged to pay out?

Reply to
s_pickle2001

Why? At least the amount guaranteed by HMG should be considered reasonably safe.

Reply to
s_pickle2001

I don't think the FSCS are obliged to pay any interest at all. Their only obligation is to refund the difference between the initial ?20,000 that the Icelandic authorities were supposed to pay, and the £50,000 maximum entitlement that the FSA requires. That puts their maximum liability at around £34,000 per depositor.

The only reason they're paying more than that is to fulfil the undertaking that Alistair Darling made the day after Icesave failed that UK depositors would not lose out as a result of this.

Chris

Reply to
Chris Blunt

I think FSCS have to pay the interest accrued up to the day the bank is declared to be in default. But forget Icesave. Imagine that the directors of a bank know that the bank is going to go under. So on a Friday, they decide that they are going to pay 100% daily interest, also credited to the accounts daily. By Monday, all account balances are multiplied by 8 and the bank goes duly bankrupt. Would FSCS be obliged to pay out, or where is the limit where they could say that the interest rate was excessive?

Reply to
s_pickle2001

I think they would declare them in default on Friday.

Reply to
Jonathan Bryce

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