Iceland Hangover

mark99

Does any of this story mean that savers in Icelandic Banks should worry, especially if over £35,000??


http://www.moneyweek.com/file/47411/why-iceland-is-suffering-a-nasty-financial-hangover-.html


Mark

mark99

And I suppose another question would be if you have most of you savings in accounts with

1) Icesaver
2) Kaupthing Edge


as they pay decent interest, is this too much exposure to Icelands possible "problems"?

I know about the £35K guarantee but a mate of mine has £100K with each.

Mark

SaverRanger

I have money with IceSave, am I going to worry unduly because of that article?.......NO.

msaquib

Hi,

I currently have 25k in my my icesave savings. Do you think it's save to keep the money in this account or move it?

Thanks
M

mark99

Anything up to £35K is safe like any savings institution signed up to the Uk
code.

Mark

LongTermLurker

mark99 wrote: »

Does any of this story mean that savers in Icelandic Banks should worry, especially if over £35,000??


http://www.moneyweek.com/file/47411/why-iceland-is-suffering-a-nasty-financial-hangover-.html


Mark

I think Iceland has become a kind of Whipping Boy in recent months; it's not totally unfounded - in 1992 there were just over IKR100 to the Pound, but the last few years have seen it rise to IKR135 - IKR150 = £1. Add to that, the Icelandic desire to buy everything - and I mean everything - on credit and spend what cash they have on £4 - £6 pints of beer and you start to see how things could get bad.

However, common knowledge says keep no more than £35k in an institution - including space for interest - and you're covered. What isn't pointed out so often is that the worst case scenario is that you deposit your full £30000 on 1 Jan and on 1 Feb the bank folds, leaving you up to 6 months without access to any of your cash and without that cash earning any interest. The answer is to use standard investment best practices and diversify your savings using a combination of the following

1) Spread money around institutions - don't be blinkered by the 35k rule
2) Spread money around economies - don't spread all your money between Landsbanki and Kaupthing by using Icesave and KE; instead, try Iceland & India, or Iceland, India and UK
3) Put no more than £35000 with any single institution
4) Spread money over varying terms within more than one economy/institution - instant access, 1 year and > 1year would seem right to me; some might want to commit some to 6 months as well.

So if you had 3 institutions, only 1 would be in Iceland (treat them as slightly higher risk investments with better returns) and if one institution folded, you would have enough instant access funds available through the rest of your portfolio to tide you over until the FSCS compensated you for your loss.

Thoughts?

freddykrueger

This article was doing the rounds last week - you know what they say about last weeks news? It's this week's chip paper Anyway I have an account with Icesave and staying put.

Everything you do in life has an associated risk - if you believe all you read I doubt anyone would walk out the door. Life is a risk and no-one has survived it yet

LongTermLurker

freddykrueger wrote: »

This article was doing the rounds last week - you know what they say about last weeks news? It's this week's chip paper Anyway I have an account with Icesave and staying put.

Everything you do in life has an associated risk

Agreed
(and this exceeds the 10 character minimum)

chesky369

I LOVE ICEsave - never had anything bad to say about them and I've been with them since they started over here. If you're worried Mark, keep below the £35k limit - I do as a matter of principle (principal? always get it wrong) so I don't agonise about it.

LongTermLurker

chesky369 wrote: »

I do as a matter of principle (principal? always get it wrong) so I don't agonise about it.

principle.