Icesave Fixed Rate Account FSCS Option

Gerontius_2

Hi 2little...
My reading of it is this. If you take advantage of the electronic process, you will get the deposit plus accrued interest to the date of default (08/10/08) as shown on your current Icesave statement, no more no less, and you will sign a declaration that this is an end to the matter and you can claim no further compensation. This should happen within five working days of getting your second email from FSCS. However, if your bond matures significantly later than this date (11 months in your case?) you can opt not to use the electronic process, keep the money where it is until maturity, and then make a paper application (which will take six weeks or so) and get your deposit back plus all the interest that you would have been paid. But note, if you've been receiving interest in instalments rather than on maturity, you will not be able to receive these monthly instalments. You'll have to leave the money there and get it all back at once on maturity. This has great significance for people who rely on a monthly interest payment for living expenses, when it would surely then be better to use the electronic process, lose a few day's interest, get your deposit back and re-invest it as quickly as possible while reasonable rates are still available. Maybe some other people will see this differently.

Richchad

The six weeks to process the paperwork is a little worrying as presumably you will be losing interest past the maturity date, unless of course you can apply about six weeks before the maturity day.

rosebud666

If you have to wait six weeks AFTER your fixed term matures then you will lose some interest. I was thing of leaving mine in, as I would lose about £180 taking it now, but I would lose out if I left it in as well. Unless my sums are wrong, which they might be.

2little2late

qamwc1 wrote: »

You will get 6.7% up to 7 October if you take the electronic route.

Thanks Quamwc1

Mine matures on Dec 15, looks like I may just have to hang in and take the paperwork route. At this rate I will get this money before my KE money.



Cheers

2little2late

Gerontius wrote: »

Hi 2little...
My reading of it is this. If you take advantage of the electronic process, you will get the deposit plus accrued interest to the date of default (08/10/08) as shown on your current Icesave statement, no more no less, and you will sign a declaration that this is an end to the matter and you can claim no further compensation. This should happen within five working days of getting your second email from FSCS. However, if your bond matures significantly later than this date (11 months in your case?) you can opt not to use the electronic process, keep the money where it is until maturity, and then make a paper application (which will take six weeks or so) and get your deposit back plus all the interest that you would have been paid. But note, if you've been receiving interest in instalments rather than on maturity, you will not be able to receive these monthly instalments. You'll have to leave the money there and get it all back at once on maturity. This has great significance for people who rely on a monthly interest payment for living expenses, when it would surely then be better to use the electronic process, lose a few day's interest, get your deposit back and re-invest it as quickly as possible while reasonable rates are still available. Maybe some other people will see this differently.

Thanks Gerontius, most extremely clear to a simpleton such as I.

Mine actually matures Dec 15th so noy quite sure what to do.

M

Gerontius_2

Hi 2little..
Only a guess, but I suspect that the six weeks quoted was based upon the numbers estimated to take the paper route. I suspect that sufficient ppl will have had such a bad experience or urgently need the monthly interest that the numbers taking this option will substantially decline as the months go by. I am only twelve weeks into three year bond - I bet by the time it matures there will only be a handful of depositors remaining, in which case a six week wait seems unlikely. Quick calculation shows me that even to lose six weeks interest at the end of three years is to reduce my rate by a fraction of 1% which will still, I suspect, be much better than available rates after the next three years. Only surmise, mind... As for your maturity date, the six weeks wait is significant. I would get out electronically and re-invest. Is Saga one year @ 6.85% open to you?

soulsaver

Gerontius wrote: »

Hi 2little..
Only a guess, but I suspect that the six weeks quoted was based upon the numbers estimated to take the paper route. I suspect that sufficient ppl will have had such a bad experience or urgently need the monthly interest that the numbers taking this option will substantially decline as the months go by. I am only twelve weeks into three year bond - I bet by the time it matures there will only be a handful of depositors remaining, in which case a six week wait seems unlikely. Quick calculation shows me that even to lose six weeks interest at the end of three years is to reduce my rate by a fraction of 1% which will still, I suspect, be much better than available rates after the next three years. Only surmise, mind... As for your maturity date, the six weeks wait is significant. I would get out electronically and re-invest. Is Saga one year @ 6.85% open to you?

You may be right in your interpretation, but I think it means the paper process will follow immediately on from you electronically electing to leave the FT bond to maturity, and will take 6 weeks to complete. Then there will be little or no wait at maturity?
Why would they mention the six weeks? Well if your bond matured in, say, 14 days, you'd have to weigh up whether to take an interest hit taking it electronically (so int up to oct 7) or waiting the 6 weeks for the paper process and getting all your interest.

Sillychuckie

I am still not 100% sure whether those leaving the money until maturity will have a hit on their interest due to the '6 week' process, or whether interest will be backdated right up from 07th Oct 08 (meaning that in terms of interest, it would be as if the Icesave mess never happened in the first place).
I don't think it is very clear, and will contact FSCS before I make my choice.

SC

qamwc1

Point 32 of the FSCS Icesave FAQ effectively says that if you elect (by going online after your second email) to leave the monies then that act will get them to send you the form and you are asked to return the form asap. Then money should then follow shortly after maturity.

The key issue is how long to go to maturity - if you take your money now then interest is only to 7/10/08. The trick is to weigh up earning interest to maturity date and figuring how money weeks beyond the maturity date the six week period will take you. You can probably only decide that after you get your second email. It is quite possible that even if your maturity date is soon it may be better to take the paper route - as you may get say 8 weeks interest reinstated (maturing early December) and lose up to 6 weeks waiting (possibly less). Of course you may want to get one of the deals out there now before they drop rates - then you need the cash asap.

http://www.fscs.org.uk/faq/icesave_faqs/

qamwc1

Sillychuckie wrote: »

I am still not 100% sure whether those leaving the money until maturity will have a hit on their interest due to the '6 week' process, or whether interest will be backdated right up from 07th Oct 08 (meaning that in terms of interest, it would be as if the Icesave mess never happened in the first place).
I don't think it is very clear, and will contact FSCS before I make my choice.

SC

I think this is answered at point 28 of the FSCS Icesave FAQ