GOOD NEWS INTEREST WILL BE PAID - if you're unhappy about this- GET OVER IT!

KathysBoy

The only definitive place for information is in the FSA Handbook. This contains the set of rules that the FSCS use to operate the scheme. It´s very complicated and reading it is like wading through treacle, as there are constant cross references to other sections. This is the link to the handbook
http://fsahandbook.info/FSA/html/handbook/
The rules are in this section :
http://fsahandbook.info/FSA/html/handbook/COMP
The relevant clause for a claim is
"COMP 3.2.1 The FSCS may pay compensation to an eligible claimant, subject to COMP 11 (Payment of compensation), if it is satisfied that:
(1) an eligible claimant has, for claims other than claims under a protected contract of insurance, made an application for compensation;"
The definition of a claim is
"1) (in COMP) a valid claim made in respect of a civil liability owed by a relevant person to the claimant."
Basically this means that if you are unable to withdraw your deposit you can claim compensation. This includes interest accrued, because if you were have to sue them as an individual then you would include the interest in any claim, because you technically have a contract with them that you will deposit money, and they will pay you interest. If its instant access, then you can close the account at any time and withdraw the money plus the interest accrued upto that date. So you would sue them for "breach of contract" if they were unable to repay you, and your claim would include the interest accrued.
There´s no definition of "Civil Liability" in the "Handbook" but "Breach of contract" is one of the general definitions of "civil liability" and it´s pretty basic contract law as far as I can see (I´m not a lawyer though),

Fixed deposits are slightly different as your contract is for them to pay you at maturity. This is covered in this section
"COMP 12.3.1 For a protected deposit claim, the quantification date is the date the relevant person is determined to be in default, or the date the protected deposit was due and payable, if later. "
This supports the previous comments that you will only be able to claim on maturity (ergo, this would also include interest).

This is my interpretation of the rules, which as I say are very complicated

yee_har

Thanks for dragging this Fixed Rate bond question back guys.

Christine Ross of SG Hambros answered (on Working Lunch today to this very question ) that Fixed Rate bond holders should be compensated for interest on unmatured bonds "the same as any other type of savings account holder".