Icesave: how safe are your savings? Facts and myths

dusty2dusty

MSE_Archna wrote: »

This is the discussion to link on the back of Martin's “Don’t mess with da MoneySavin’ Family…” blog. Please read the blog first, as this discussion follows it.

Read Martin's Icesave: how safe are your savings? Facts and myths Blog.

Click reply to discuss below.

Have just moved last years isa from Bradford & Bingley due to drop in interest rates to Icesave, and intend to put this years allowance in also. At a steady interest rate i'm prepared to take the risk. No doubt which ever bank your in if a collapse happens you are going to have a wait for your money, and the way the big banks perform in this country it could be a long process

stingyscot

I withdrew my substantial deposits from Icesave (Iceland), FirstSave (Nigeria) and ICICI (India), following an alarming TV report. At least I tried to... Firstsave initially gave me back less money than I'd actually deposited, and no interest. They said it was something to do with it being a leap year! They did send a little more, two days later, following my query, but I wasn't convinced by their explanation, nor entirely sure that I did eventually get all my money back. Presumably they don't have leap years in Nigeria.

sainthalo

can you speak read and write icelandic?

I CANT!!!!!!

bubieyehyeh

I've got a question I've not seen an answer to anywhere. If the Icelandic scheme ran out of money and could not pay the full amount, would the UK scheme pick up the slack, and cover upto £35,000.

kgab6124

My late night opinion.

I'm not in agreement with Martin's comment about Northern Rock or Bear Sterns(BS). While Northern Rocks problems weren't about losses, the liquidity situation is that the Government is currently loaning 106BN to them to keep them funded and be able to run down their mortgage portfolio. If I remember correctly their total deposits were under 10BN... even if there was no 'run' on the bank they didn't have the cash to continue and certainly wouldn't now as the credit crunch is even worse. BS blew up a couple of hedge funds to start the credit crunch process off.. they chomped down as many mortgage backed securities as they could in the heydey and were leveraged up to the hilt.. my opinon as a man that previously built risk models for banking institutions both these companies believed that 'this time it (risk) is different' and were v. v. wrong... with BS see Ben Bernankes comment today.

Icelands situtation is not good. I'm no expert, but they are (from the hedge funds and global economy) small enough to allow to fail... see the 80's for last set of bank failures and housing crisis' in the Scandies. Hedge funds are going to want to tear them apart for a quick buck. BUT.. the CDS rates are irrelevant; the banks are NOT buying their own CDS's so its not a cost to them... sorry Paulpaul1308 but the only relevance of CDS rates are that the world is worried that these banks are in trouble.

I've pulled my parents money out of these banks. I don't want to be reactionary but its a scary world out there. The fact that these folks (sound like they) need the deposits to survive makes me not want to be the one holding the can when everyone else has played safe.

Cash is king.

S

paulpaul1308

cynic wrote: »

Lets look at the bigger picture here.

Icelandic banks have been aggressively setting up saving accounts in this country. They pay top rate, well above the BOE base rate. Question is how do they "afford" to do this?

Easy. They take your money and invest in the krone, which currently pays 15%.

It used to be the case that a very easy way to make lots of free money was to borrow stable yen - which was practically interest free - and buy krone, which paid top whack interest and was also stable. Now the falling krone doesn't make that attractive.

stevemd

I found the article and discussion very interesting . At present I am considering opening an Icesave ISA and transferring previous years savings into it. Although its good to know our savings are protected up to £35k, if the bank was to go under for some reason would I be able to pay the compensation amount in to another ISA? I know its seems like a minor point but after 5 years of tax free build up it would be good to know.

BrianD

Having lost out at Equitable Life I have voted with both feet and closed my Icesave account. I am not doing a transfer as it would take too long.

drondo

Martin says that Icesave is an EU bank, but Iceland isn't in the EU. I'm confused.

fellas1990

drondo wrote: »

Martin says that Icesave is an EU bank, but Iceland isn't in the EU. I'm confused.

It's in the EEA (european economic area) which allows it to adopt certain EU rulings and legislation.