You are probably fed up of the same questions but I have 30K in a fixed rate, fixed term account with Icesave - it comes to maturity in less than 2 weeks, In view of the latest news from Iceland how safe do you think my money is?

thankyou.

Hi honeysuckle,

No problem. The Icelandic Government has - in the last hour - announced it is to guarantee all savings held in Icelandic banks after they suspended trading in shares of the three largest banks - Landsbanki, Glitnir and Kaupthing.

They are in the process of drafting a plan which may mean that the three banks might have to sell some of their overseas assets, but it's my understanding that this currently means that your savings are 100% guaranteed by the Icelandic Government.

While it's worth keeping an eye on what happens, this is similar to the announcement made by the Irish Government last week and means that your savings are fully protected, whatever the amount.

I'm sure some of our community members have similar concerns and can share their experiences.

Clare Francis, our site editor, also covers this in her latest article 'Market meltdown, what now for savers?'.

I hope that helps.

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Cheers,
Graeme Delap, Community Editor,
graeme.delap @ moneysupermarket.com (remove the spaces)

Hi Graeme, Are you still standing by your comments. I have in excess of £50,000 in fixed rate term savings with them? By the way should this site still be showing them on here as you can't use the internet site. I found ICESAVE on this site orginally! Lets hope I do not regret it!

Hi kev2006n,

At the time of posting, that was the information available - hence my suggestion that it was worth keeping an eye on what was happening. We're currently in the process of trying to clarify the exact details of the Icelandic Government's guarantee and are waiting for a response from Icesave regarding why they have currently suspended the processing of deposits and withdrawal requests through their internet accounts.

Rest assured, I'll let you know as soon as I have more information, but the situation appears to be changing on a daily and hourly basis at the moment.

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Cheers,
Graeme Delap, Community Editor,
graeme.delap @ moneysupermarket.com (remove the spaces)

Hi

Thank you for your reply yesterday but after hearing the news that ICESAVE has stopped UK customers withdrawing their money, bearing in mind my fixed term account matures in less than two weeks. Is this good or bad news for me.

Regards

Honeysuckle

Hi Graeme, Many thanks for your prompt response. It is a very worrying time. I have invested over £100,000 in ICESAVE in order to help meet my Mother's nursing home costs. No doubt many will regard me as foolish. However, when there are bills of over £3,000 per month to meet her health needs you have to grab the best rates around.

I have a few bob in Kaupthing Edge, and their website is working normally. The BBC News website has reported that the Icelandic government is guaranteeing all deposits - effectively meaning that Iceland would have to go bankrupt before your savings would be lost.

Hi both,

Apologies to you all if yesterday's reply was unclear. As I mentioned earlier, it was correct - based on the information available at the time I posted. We've now had clarification that the Icelandic Government guarantee applies only to funds invested in Iceland, by Icelandic depositers and I stand corrected.

For investors with Icesave, you are still protected up to £50,000, but it is signed up to the European passport system. In the the event of it going bust, savers would first claim compensation from the Icelandic compensation scheme (about £16,000) and then the remainder, up to the £50,000 cap, through the FSCS.

The table in Clare Francis' article 'Who owns who' shows the level of compensation.

As soon as I have further information about why Icesave have suspended their site, I'll let you know.

Update (10.22): I see that the BBC are now reporting the Icelandic government has taken control of Landsbanki (and the Icesave brand). I'll let you know more information as soon as I do.

Update (10:29) As far as I'm aware, this doesn't really change anything at the present time: if you have up to £50,000 in an Icelandic institution, your savings are protected. The only issue is how you obtain that money in the event of a collapse.

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Cheers,
Graeme Delap, Community Editor,
graeme.delap @ moneysupermarket.com (remove the spaces)

Hi Graeme

last Night at 10pm i transfered my money out of ICESAVE nback to my UK bank

This emptied the account and closed it automatically

Will it have gone through and appear in my bank over the next few days or am I being naive ??

The BBC News web site has now said that the FSA is under the opinion that Icesave will be declared insolvent soon, and that the first 50k is in fact protected under the 2 schemes,

http://newsvote.bbc.co.uk/2/hi/business/7656387.stm

There is a mixture of views on whether or not Icesave has actually gone into insolvency. But assuming it is bad news what do I do and where do I go to claim my funds.

regards

Hneysuckle

What happens when you have a Fixed Int account maturing next year? Does the compensation cover interest accrued or just the capital sum invested?

Just to keep everyone updated, the FSCS page has been updated with the following statement:

FSCS gears up to assist Icesave's UK branch customers

"In the light of the current uncertainties, the Financial Services Compensation Scheme (FSCS) is today gearing up in case it needs to assist approximately 300,000 savers at Icesave.

Icesave is the UK branch of Landsbanki Islands hf (trading here under the registered name Icesave). It is an EEA bank that is authorised by the Fjármálaeftirlitið (FME), the financial services regulator in Iceland. The Financial Services Authority in the UK has reported that Icesave is now expected to go into insolvency proceedings in Iceland and this would trigger an FSCS default.

Eligible savers with Icesave are protected by the Icelandic Depositors' and Investors' Guarantee Fund (IDIGF), up to a limit of the first 20,887 euros of their deposits. As an Icelandic bank Icesave is not automatically a member of the FSCS, but it opted to become a 'top-up' member. This means that eligible retail savers with Icesave's UK branch whose savings exceed the Icelandic limit would benefit from top-up compensation from the FSCS covering the amount over the Icelandic limit up to the new FSCS compensation limit for deposits of £50,000.

If the default is triggered as expected, FSCS will contact all UK savers directly with details of how to apply for compensation. Further announcements will follow and we will keep this page updated."

Source: http://www.fscs.org.uk/consumer/

You can also click here to read Kevin Mountford's latest article, 'Banking chaos - advice for savers'

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Cheers,
Graeme Delap, Community Editor,
graeme.delap @ moneysupermarket.com (remove the spaces)

My question is in the same vein as strappedforcash.

I withdrew everything from my Icesave Cash ISAs on Saturday and the account was automatically closed (and a good job I took screen printouts to prove what I had). It takes 4 working days to clear, and as processing began on Monday, it should be clear on Thursday.

But what is the banking process for this? Can Icesave halt or "pull back" the withdrawal a day after it's begun? Or is it in the banking system's "electronic ether" and will eventually come through?

To quote Tom Petty & The Heartbreakers, "The waiting is the hardest part..."

The Icelandic government has put Landsbanki (the Icelandic registered bank) into receivership. In the UK, Landsbanki has a branch, and the branch trades under the name 'Icesave'. A branch and its head office are the same legal entity so a receivership of the head office affects the branch too (it's different where a branch has a legally separate subsidiary company). The receivership is a legal process in Iceland (but UK savers should still have rights in that process).

A receivership is different from an insolvency because it doesn't automatically mean that the bank will close down for good (though it doesn't exclude it either). The main purpose of a receivership is to give the company legal protection from its creditors and in this case, to allow the Icelandic government to take full control of the bank.

In the UK, European banks have to choose one of two options to protect savers - opt for full coverage under the UK compensation scheme (FSCS) or ask creditors to claim the first slice (20,887 euros) under (in this case) the Icelandic scheme and the next slice (up to £50,000) under the UK FSCS. Landsbanki opted for the Iceland / UK FSCS model, hence the 'two claims'. A lot of people are saying that because of the current crisis, the Icelandic scheme may not be able to pay out. However, there are some articles saying that in that case either the other Scandanavian governments have an obligation to step in and support the Icelandic goverment, or the FSCS will pay out.

Unfortunately, the Icelandic government has said that its government guarantees will not apply to the large number of UK and Dutch savers who have Icesave accounts. However it has said that it expects Landsbanki to have enough money to honour its UK and Dutch deposits. The UK Financial Services Authority has already said to hold tight and wait for more news. Given the large number of estimated UK savers, some papers are already speculating that the FSA may try and streamline any claim process so that people only have to lodge one claim with the UK FSA and not two (one in Iceland, one in the UK).

I am overseas (on my honeymoon!) and couldn't withdraw my money last week as I wanted because I didn't have the account details with me. I called Icesave today and had little trouble getting through (two tries to get in the queue), and only a 5 minute wait on hold before speaking to an operator. She was able to confirm my account balance (just under £40k) and seemed pretty calm and friendly.

There are a lot of rumours swirling on the wind right now about what will happen next. The bottom line seems to be that our money is stuck for now and it's not completely clear whether Landsbanki has shut its doors for good. If it has, it might be a couple of months before we can extract our money again, but our chances of getting the money back (up to £50,000) look ok and we are very lucky (relatively speaking!) that this all happened after the government increased the savings protection from £35,000 to £50,000.