ICICI term deposit?

backfoot

LongTermLurker wrote: »

I think interest is paid at the end of the year by ICICI - so if they went bust in June, no interest would have been added and they wouldn't add any then because they would have gone bust.

Kaupthing Edge are similar, but they pay at the end of the term, which may be 3 years away. That can be a good thing if your tax liabilities will reduce in that time, but means you won't get proportionate interest during the term.

I had always assumed,rightly or wrongly, that the FSA compensation scheme would cover you for accrued interest up to the point of failure.Are you saying that is incorrect? Does anyone have chapter and verse on this?

LongTermLurker

backfoot wrote: »

I had always assumed,rightly or wrongly, that the FSA compensation scheme would cover you for accrued interest up to the point of failure.Are you saying that is incorrect? Does anyone have chapter and verse on this?

That's correct, but if it's never been assigned, it's never been accrued. Just because interest is owed, doesn't mean it's yours until it's been added to your account, which in this case would be several months after the bank (hypothetically) ran out of cash.

If an account pays interest monthly, then it's already accrued at the point of failure, and will be protected if within the £35k limit.

And to save others pointing it out, it's the FSCS, not the FSA - sorry to be pedantic

Paul_Herring

Does anyone have chapter and verse on this?

Not on the FSCS website certainly. They aren't (weren't) even clear on the following situations:

1) 100K mortgage, 50K savings
2) 100K savings, 50K mortgage
3) 85K savings, 50K mortgage

I seem to recall (probably R5Live Wake up to Money podcast, but ICBW) that when someone at the FSCS was asked about savings interest accrued, but not yet deposited when the institution folds, they [FSCS] had to go to lawyers before replying 'yes, it's included in the limit,' but I cannot give you a cite for it I'm afraid..

backfoot

I have spoken to the FSCS.

They confirm that in the event of a failure,accrued interest on a Bond would be payable up to the point of failure.

Very good news.

vx220fan

backfoot wrote: »

They confirm that in the event of a failure,accrued interest on a Bond would be payable up to the point of failure.

Does this mean if the bank were to go bust, the initial deposit would be repaid PLUS interest as if it had been calculated daily/monthly up to the point of failure? In other words, there's absolutely no risk whatsoever? No potential loss of interest?

Or does it mean the initial deposit would be repaid plus any interest that's ALREADY been deposited?

I hope the former but sounds too good to be true!

backfoot

vx220fan wrote: »

Does this mean if the bank were to go bust, the initial deposit would be repaid PLUS interest as if it had been calculated daily/monthly up to the point of failure? In other words, there's absolutely no risk whatsoever? No potential loss of interest?

Or does it mean the initial deposit would be repaid plus any interest that's ALREADY been deposited?

I hope the former but sounds too good to be true!

They were entirely clear that it was the former.i.e.interest due up to the point of failure.I quoted the example of a 12 month bond with interest payable on maturity.If it failed after six months you would get your capital plus 6 months interest.

Why too good to be true? It's only right and fair.:j

MalcolmPreen

Personally, I'm getting out of ICICI - not because of any fears - but precisely because of the customer disservice.

Beware of Term Deposits - they are set up to auto-renew, so if you want to take your money elsewhere after it matures you can't unless you have specifically changed the Term Deposit.

Malcolm

neil324

MalcolmPreen wrote: »

Personally, I'm getting out of ICICI - not because of any fears - but precisely because of the customer disservice.

Beware of Term Deposits - they are set up to auto-renew, so if you want to take your money elsewhere after it matures you can't unless you have specifically changed the Term Deposit.

Malcolm

What do you mean 'changed the term deposit'

MalcolmPreen

neil324 wrote: »

What do you mean 'changed the term deposit'

If you login, the select Service Requests... then Closure of HiSAVE Fixed Rate Account - EA

You then fill in the details (select which Fixed Term account), note specifically that you can access Fixed Rate Account to be closed on * this can be set to Maturity or Premature (if you close it prematurely you will get a lower interest rate). By default, the Fixed Term deposits auto renew.

Hope that helps

Malcolm

neil324

MalcolmPreen wrote: »

If you login, the select Service Requests... then Closure of HiSAVE Fixed Rate Account - EA

You then fill in the details (select which Fixed Term account), note specifically that you can access Fixed Rate Account to be closed on * this can be set to Maturity or Premature (if you close it prematurely you will get a lower interest rate). By default, the Fixed Term deposits auto renew.

Hope that helps

Malcolm

Ok, but when i opened the fixed term, there was an option to auto re-invest which i did not select.

So i have to make sure it closes by selecting this as you explained.

Thank you.