Is Icesave now the best place to leave fixed rate accounts?

No_worries

Now that the FSCS has declared that there is an option to leave fixed rate accounts with Icesave to run to maturity and receive 'maturity interest' then surely this is about as safe a place as the money can be?

I have some fixed rate accounts with Icesave earning over 7% and the FSCS have guaranteed that our money is safe (?) - so presumably the best option is to leave it there now?

Am I missing something - should I grab it whilst I can and put it elsewhere for 5% only to watch another bank faulter? Help appreciated!

magpiejay

I'm wondering the same thing. i suspect yes, though I'd need to be confident on the rate and speed of repayment. Perhaps Martin will report on this in the coming days.

Reaper

Yes except
1) Some people have interpreted the wording to mean no interest will be earnt* between now and maturity (though that is not my interpretation)
2) There is also confusion about whether it will take 6 weeks after maturity to do the paperwork and give you the money, or whether the paperwork can be done in advance. That might make a difference to you if the maturity date is soon.

* EDIT: Changed word to make it clearer

~Chameleon~

It's certainly looking more and more attractive and I'll most likely leave mine until maturity now, assuming I'll get original the 7.01% rate.

agsnu

Reaper wrote: »

Yes except
1) Some people have interpreted the wording to mean no interest will be paid between now and maturity (though that is not my interpretation)

I don't know how else you can interpret the wording, it's quite clear:

You should also be aware that if you hold a fixed rate savings account that pays interest on a monthly, quarterly, or annual basis, and you decide to hold that account until maturity, you will not be paid any interest prior to maturity.

No_worries

The actual wording is: "On the other hand, if you prefer to wait until the end of the fixed term, and receive interest WHICH WOULD HAVE BEEN DUE AT MATURITY...."

This does imply that the interest rate remains the same and pays as it would have done, ie £10000 at 7% would have produced £700 interest a year 'at maturity' so presumably still will?

But we do need clarification.....

KingL

I don't know how else you can interpret the wording

You can interpret "you will not be paid any interest prior to maturity" as meaning

(1) you won't receive any payments prior to the point of maturity, but at the point of maturity you will receive a single payment of all the interest that you accrued over the entire term, but which has not yet been paid.

or

(2) you wont (ever) receive any of the interest that (should have) accrued at some point(s) prior to maturity.
i.e. either (a) you won't get any interest from 8 Oct 08 until maturity or (b) you just won't get any interest whatsoever

personally, I read it as (1)


.

isofa

http://forums.moneysavingexpert.com/showthread.html?t=1265097

~Chameleon~

KingL wrote: »

You can interpret "you will not be paid any interest prior to maturity" as

(1) meaning you won't receive any payments prior to the point of maturity, "but at the point of maturity you will receive a single payment of all the interest that you haven't received.

(2) you wont (ever) receive any of interest that (should have) accrued at some point(s) prior to maturity. i.e. either (a) you won't get any interest from 8 Oct 08 until maturity or (b) you just won't get any interest whatsover

personally, I read it as (1)

I also see it as option (1) and think the wording of this has been chosen to clarify the point that those who previously had interest paid monthly will now have to wait until maturity to receive their interest, i.e. no monthly interest payable.

shindigger

My bond finishes on Dec 22nd. I would like clarification on the this paperwork business, as if i wait 6 weeks from term end, earning nothing on it, i may as well have it now and hope theres an account around still paying 5% in a months time.
Can we do the paperwork in advance. Can someone get clarification on this?

I feel i need a permanent financial adviser at my side the whole time at the minute. Is it ALWAYS gonna be like this now?
What a total pain in the !!! this all is.:mad: :mad: :mad:

Icesaver

KingL wrote: »

You can interpret "you will not be paid any interest prior to maturity" as meaning

(1) you won't receive any payments prior to the point of maturity, but at the point of maturity you will receive a single payment of all the interest that you accrued over the entire term, but which has not yet been paid.

or

(2) you wont (ever) receive any of the interest that (should have) accrued at some point(s) prior to maturity.
i.e. either (a) you won't get any interest from 8 Oct 08 until maturity or (b) you just won't get any interest whatsoever

personally, I read it as (1)


.

And if it were 2 why on earth would they FSCS give you the option of leaving ithere, other than it's less for them to pay out right away? I agree with your interpretation of (1)