On Tuesday, I read in the papers that the Icelandic bank, Icesave was on the brink of collapse, another casualty in the credit crunch crisis that is hitting the world. It struck fear and anxiety in me as I have all my savings in the bank.. arrrgh!! Their website read:

“We are not currently processing any deposits or any withdrawal requests through our Icesave internet accounts. We apologise for any inconvenience this may cause our customers.”

I was able to log into the site and look at my balance but indeed, I was unable to get my money out… the press were saying that the first chunk of money was not covered by the FSA but with the Icelandic Deposit Guarantees and Investor-Compensation Scheme.. anyway, rather than me explain, I’ve just copied and pasted as below:

“Deposits made with Icesave are protected under the Icelandic Deposit Guarantees and Investor-Compensation Scheme (details of this scheme may be obtained from www.landsbanki.com/legislation). Payments under this scheme are limited to the first €20,887 (or the sterling equivalent) of your total deposits held with us.http://www.icesave.co.uk/financial-protection.html

You have further protection from the UK Financial Services Compensation Scheme (www.fscs.org.uk). Payments under this scheme are limited to 100% of the first £2000 of all your deposits with us, plus 90% of the next £33,000 of your total deposits with us, less any payments made under the Icelandic scheme. This means that the maximum claim amount as at June 2006 is £31,700.”

 It wasn’t good reading particularly since there is no money in the Icelandic system due to what’s happened but then the British Government stepped in and have guaranteed all savers their money which is fantastic, I feel so much better…

http://www.hm-treasury.gov.uk/press_101_08.htm

So, ok, how do I take my money out? I have absolutely no idea but the first thing you should do is to login to the site and print out your statement so you don’t get screwed over.

I am following the site by Martin from Money Saving Expert as he is updating his site with the latest news, the link is http://www.moneysavingexpert.com/savings/safe-savings#Icesave

Although the British government has said that they guarantee the retail deposits, the same cannot be true of the wholesale deposits… the UK treasury hasn’t mentioned bailing them out. The things is, a load of councils had their money in the Iceland banks which in total may amount to £1 billion. The links below shows the amount of money invested by various councils in the UK:

http://news.sky.com/skynews/Home/Credit-Crunch-Council-By-Council-List-Of-Cash-Invested-In-Icelandic-Banks/Article/200810215117033?lpos=Home_Carousel_Region_1&lid=ARTICLE_15117033_Credit_Crunch%3A_Council-By-Council_List_Of_Cash_Invested_In_Icelandic_Banks

Let me know what you think, drop me a comment!