'ICICI: Is it safe?' blog discussion

Former_MSE_Lawrence

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.

Read Martin's 'ICICI: Is it safe?' Blog.

Click reply to discuss below.

thepropertylandlord2

Regarding feeling more secure with a foreign bank that does NOT operate under the UK Passport Exemption Scheme, remember that Kaupthing Edge did not operate under that stupid scheme, but the government performed a massive slight of hand by transferring deposits to ING which does!

stphnstevey

It's all very well them being covered by a garantee but what about the
- time
- worry
- hassle

of claiming your money back

Why take the chance for a couple of pounds more interest

ukandy24

I have 4 accounts, all chosen from MSE top picks and so far ICICI is the only one not to have got into trouble (the others were kaupthing and two RBS subsidiaries):beer::money:.
I suppose by definition the top payers are the most vulnerable as they have the narrowest profit margins. However they were all saved and there has been no impact on me so I think it's still worth going for the best deals even if they are a tiny bit more risky. (I'm still glad I never got round to opening an Icesave ISA:eek:).

bc3000

I have some money with ICICI, but I'm not moving it unless I hear something in the news about them not doing well. I thought the Indian economy was going pretty well at the moment? Anyway, I'm enjoying my monthly interest, so I'll wait and see!

palecitrus

"It's all very well them being covered by a garantee but what about the time, worry, hassle"

Not to mention the loss of interest.

I think Martin's asking the wrong question. It shouldn't necessarily be, how much interest do you want, but how important is the money to you? Is it so unimportant that you're prepared to take a risk for an extra 0.5%?

"I suppose by definition the top payers are the most vulnerable as they have the narrowest profit margins."

Wrong. It's much worse than that. It's because they need the money. I mean, really need. A bad bank is like a Ponzi scheme, always having to attract new money to sustain the illusion of success. BCCI was technically bankrupt for more than a decade before it was closed down - it was able to keep going simply by offering a higher interest rate on deposits, hence attracting enough money to keep ticking over. All the while the money is in the bank, it's just a number, not real money.

That's why the Icelandic banks offered such good rates of interest. That also accounts for Halifax's 10% rate that closed in June, also recommended by Martin.

If a bank (or, indeed, anyone) needs your money that badly - is it wise to give it to them?

The bottom line is that if your money is important, put it in the Nationwide (5.05% - 6.5%), Co-op Bank or somewhere equally safe - any bank that in recent years has not become over-reliant on international funds (which have since dried up) to fund its UK lendings (ie. like B&B, Northern Rock, Halifax etc).

Personally, I wouldn't touch ICICI with surgical gloves, although I did go for the Halifax 10%, figuring that it ain't much money that I am putting in and that as it's UK, I'll know how to get it back again if the worst comes to the worst.

garths

I have money at Kaupthing Singer & Friedlander in the Isle of Man. This is on the FSA approved list but as it is in the Isle of Man does anyone know if this is covered by the Financial Services Compensation scheme?

cowjug

I have put some money into icici uk's fixed rate 1 year bond. I got cold feet after reading about possible problems with foreign banks and tried to transfer the money back to the Nationwide Building Society. I was told that I am not able to transfer the money out as I have signed up for the higher interest non withdrawal option. I foolishly believed that I could transfer out and just lose the interest since opening the bond. Is it true that I cannot access my money at all for a year?

palecitrus

@Cowjug: Probably, but complain to ICICI and the FSA anyway - by recorded delivery letter.

tabbycat2k

cowjug wrote: »

I have put some money into icici uk's fixed rate 1 year bond. I got cold feet after reading about possible problems with foreign banks and tried to transfer the money back to the Nationwide Building Society. I was told that I am not able to transfer the money out as I have signed up for the higher interest non withdrawal option. I foolishly believed that I could transfer out and just lose the interest since opening the bond. Is it true that I cannot access my money at all for a year?

When you opened this account you were able to choose fixed with option to access early (lower rate) or fixed with no option to early access (higher rate). It is quite clear on the list of interest rates for different accounts and you have to choose specifically which one you want.

markfieldpete

I would cheerfully put some money away with ICICI for a year at their high interest rate (but obviously only if I was sure I didn't need it until 12 months hence). Unfortunately due to the snail-like pace another financial institution - an insurer not a bank - I won't be able to do it before ICICI's rate goes down next week.

A couple of weeks ago when the current banking crisis was in full swing I asked ICICI to transfer some cash out of my savings account for me. They took a day longer than expected to do this (probably because they were busy fending off worried punters) but emailed me to apologise and gave me £50. Seems pretty good to me!