Unfair interest payments with Icesave compensation.

Do you want jam on it also?

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

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

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

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

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.

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?

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

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

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?

I think they would declare them in default on Friday.