Dot ComUnity Credit Union - ISA

FOREVER21

A point to consider if Dot Com did fail and the FSCS came into play, I understand FSCS also pays interest, but what is the position with a 5 year deal.

I have looked at the FSCS site and all I can find is interest "owed" will be paid, could it be argued that interest is paid for that which has been accured , ie from account opening to closure.

Is the interest for the remaing term 4+years actually"owed"

Steve_xx

FOREVER21 wrote: »

Is the interest for the remaing term 4+years actually"owed"

No way Jose.

masonic

FOREVER21 wrote: »

I have looked at the FSCS site and all I can find is interest "owed" will be paid, could it be argued that interest is paid for that which has been accured , ie from account opening to closure.

Is the interest for the remaing term 4+years actually"owed"

For the Icesave compensation, interest was paid up until the date it was declared insolvent.

badger09

masonic wrote: »

For the Icesave compensation, interest was paid up until the date it was declared insolvent.

Interest on my 2 x 1 year fixed rate accounts with Icesave was paid up to maturity.

Steve_xx

badger09 wrote: »

Interest on my 2 x 1 year fixed rate accounts with Icesave was paid up to maturity.

That's interesting, and contrary to rule 7 here:

http://www.fscs.org.uk/what-we-cover/products/banks-building-societies/qas-about-deposits/#If_I_have_more_than_n_163_85_000_in_an_account_does_that_mean_I_will_lose_money_

badger09

Steve_xx wrote: »

That's interesting, and contrary to rule 7 here:

http://www.fscs.org.uk/what-we-cover/products/banks-building-societies/qas-about-deposits/#If_I_have_more_than_n_163_85_000_in_an_account_does_that_mean_I_will_lose_money_

I don't doubt it, but nevertheless, that's what happened :cool:

IIRC I was given the choice of immediate payout or waiting until maturity. I chose to wait. 1st matured 15/11/08, 2nd matured 8/2/09. Maturity proceeds, including all interest, were paid 22/1/09 and 24/2/09

masonic

badger09 wrote: »

Interest on my 2 x 1 year fixed rate accounts with Icesave was paid up to maturity.

That's strange, because I had a 6 month fixed rate, which matured between Icesave going bankrupt and the compensation kicking in and my recollection was that I received a little less than the full 6 months. Can't find the details right now to double check.

Edit: Perhaps I'm remembering a zero interest period following maturity and prior to the payout.

masonic

Steve_xx wrote: »

That's interesting, and contrary to rule 7 here:

http://www.fscs.org.uk/what-we-cover/products/banks-building-societies/qas-about-deposits/#If_I_have_more_than_n_163_85_000_in_an_account_does_that_mean_I_will_lose_money_

It's not actually contrary to that rule. Those accounts were fixed with no access permitted, so the customer entered into a binding contract for a fixed sum of interest at the start of the term. It's a bit different than the situation being discussed in this thread, though, since access here is permitted with an interest penalty. Whether that makes any difference or not, we can only speculate.

Steve_xx

masonic wrote: »

It's not actually contrary to that rule. Those accounts were fixed with no access permitted, so the customer entered into a binding contract for a fixed sum of interest at the start of the term. It's a bit different than the situation being discussed in this thread, though, since access here is permitted with an interest penalty. Whether that makes any difference or not, we can only speculate.

I see what you're saying here in that the agreement at the start was for a fixed period and at a fixed rate etc. But somehow I can't see the FSCS extending what it will pay to an end date that may be some years hence when they clearly state that they will pay interest at the date that the bank is declared to be "in default" It's an interesting thought/proposition. I would think it not to be the intention of the FSCS to pay forward interest in that way.

ratechaser

Steve_xx wrote: »

I see what you're saying here in that the agreement at the start was for a fixed period and at a fixed rate etc. But somehow I can't see the FSCS extending what it will pay to an end date that may be some years hence when they clearly state that they will pay interest at the date that the bank is declared to be "in default" It's an interesting thought/proposition. I would think it not to be the intention of the FSCS to pay forward interest in that way.

It's an interesting idea though - if true, would that also mean the FSCS would delay compensation of the principal amount until the original maturity date as well? Because if not, AND they paid out on the full term interest, then I think I need to start looking for a few borderline insolvent institutions where I can open up 5 year savings bonds and hope for an early collapse

It could be the new version of carpetbagging!