The Money Blog

The Treasury today guaranteed that no British customers of Icesave would lose their savings after the Icelandic online bank collapsed yesterday. This comes as a relief to the estimated 300,000 British savers who were left fearful on Tuesday night that they would need to fight for any compensation.
Icesave was owned by Landsbanki, Iceland’s second largest bank, which has collapsed into receivership and is now being run by the Icelandic Financial Services Authority and all withdrawals from the accounts have been frozen.

More than 300,000 British customers had around £4 billion deposited in Icesave accounts, with the average saver having about £15,000 with the bank. There were an estimated 15,000 British savers with more than £50,000 deposited with Icesave.

Icesave was one of a handful of banks the uses the passport exemption - meaning that savers are supposed to apply to the Icelandic authorities for the first £16,170 pounds they have lost, with the British compensation scheme topping up the rest.

Mr Darling said: “Because this is a branch of a foreign bank the first call would be on the Icelandic compensation scheme which, as far as I can see, hasn’t got any money in it.

“The British scheme would top that up to £50,000, but people over and above that would lose out,” he told Radio 4’s Today programme.

“But I have decided in these exceptional circumstances that we will stand behind those depositors so they get their money back.”

Later, a Treasury spokesman said: “We guarantee that no depositor will lose any money as a result of the closure of Icesave.”

The move by Mr Darling has been welcomed by many financial experts, who have urged the Chancellor to be more explicit in guaranteeing all depositors’ savings. He has been accused of dithering over the issue, creating more chaos for the savings market.

300,000 British savers were left uncertain about whether they had lost their life savings yesterday, after Iceland’s second-largest bank went into receivership.

Savers seeking to withdraw money from Icesave, an arm of Landsbanki, the Icelandic bank, have found they could not operate their accounts online.
A message on the Icesave website said: “We are not currently processing any deposits or any withdrawal requests. We apologize for any inconvenience this may cause our customers. We hope to provide you with more information shortly.”

As recently as Monday, Icesave was still insisting that it was “business as usual” despite the bank’s website temporarily crashing as thousands of savers desperately tried to gain access to their cash. The 300,000 saver could face weeks of uncertainty as their deposits were frozen, after the decision by Iceland’s financial regulator to take control of the stricken bank.

According to a recent article in the Iceland Review, says Icelandic Banks in the UK are benefiting from recent banking crisis in the UK and US. Icesave and Kaupthing Edge have seen surge in business after UK customers lost faith in their own banks.

Kaupthing said that Monday was in fact the fourth best day of business since it launched its Edge savings account in February this year.

If this article is true, you will expect in the months more UK and US banks facing credit crisis and since depositors are taking out their money, the Central Bank will have to bail them out.

As the UK and United states continues to show signs of economic downturn and cost of food, fuel and interest rate continues to rise, knowing how to reduce your expenses and changing your spending habits can make your money go further during economic recessions and economic downturn.
Switch your mortgage: If you have a mortgage and your interest payment is too high. Why not switch your mortgage to a better deal. You will surprise at the savings you could make. To find out the best deals on offer use a fees free broker to check.

One common phrase in today economy is the phrase “making the most of your money”. You will find this phrase used in supermarket and shopping advertisements but now commonly used in the area of savings and investments. The question I will be trying to answer is just how do you “make the most of your money” in the area of savings and investments.
If you have some extra money each month after your expenses the best thing to do with this money is to find a bank that we invest the money for you and make the money work hard for you. Burying the money in a coffee Jag out in back yard or hide it underneath your mattress will never see the money grow but in fact could depreciate in value as a result of inflation. Depending on how much you have to save, you could be currently earning upwards of 6% on top of that money. That means for every £100 you deposit in a savings account, the bank add £6.00 on top every year. That doesn’t seem like much, but in a year of monthly deposits, you could earn almost £80 for just having your money sitting in the bank.
As an incentive for you to give a bank your money, they offer higher introductory savings rates and other deals such as interest rates that pay you a set amount of interest on your money over a specified time limit monthly, quarterly, or yearly.
With all that said, how do you find a bank that will pump up your investment? Do your research. Search for banks with the high percentage rate for your money. The general rule is the higher the percentage rate the more money you will generate.

Saving accounts are great way for investing your money with minimum risk to your investment. But not only useful for investing your money but can help you keep your expenses under control. Putting away a set amount of money each week or month and you will surprised at how quickly this money can add up. A lot of saving accounts only require a pound to open an account while others may want you to deposit anywhere from 5 pounds to 1000 pounds a month.

Some types of savings accounts offer you with latest money saving techniques. By adopting these techniques you can save your money from flying away through avoidable costs and unnecessary expenses every month.

Some types of savings accounts helps you save toward important holiday seasons. This allows you to save money for Christmas. If you start it early enough in the year by the time Christmas rolls around you can have a nice amount for your holiday shopping.

Some type of savings accounts offer by some banks link your debit card with your savings account. Every time you make a purchase using your debit card the amount is rounded up to the next pound and the extra is deposited into your savings account. Some of these banks will even match the amount deposited by a certain percentage.

Some savings accounts offers internet banking facility for convenience of their clients. This makes it very easily to monitor your savings and personal spending via online banking and stay within your budget.

Some savings accounts allow you to borrow money from your bank using the money in your savings accounts to secure the loan. This can make it easier to get an unsecured loan should you need it.

One important thing to consider when opening a saving account to put your money into is the interest rate being offered by the bank. You will need to compare the bank saving account interest rate with other banks offering the same type of service. Commonly the rate being offered with is based on the type of account you choose and the balance that will remain in there every month.

The question for many is how to determine which saving account to use and which interest rate is the right for them. The answer is by comparing the saving account interest rate along with the obligations of the account you choose. By comparing both the interest rate and the obligations you will be able to see if the interest rate offered is worth the commitment they are asking you to make. For example, most banks will offer you a basic savings account with minimum fees and no minimum monthly balance. That means you can keep in the account any amount you please, you can deposit and withdraw finds for no fees. But, the interest rate you get for our money will be only minimal.

There are saving accounts which offered high interest rates. But these accounts may require a minimum monthly balance of one thousand pounds and will charge hefty withdrawal fees. In most cases no interest is pay if the average monthly balance is below the minimum agreed on. This type of saving account ties your money up. Therefore, before opening a new saving account, you need to decide how much money you can afford to keep in the bank, and as a result which saving account plan work out best for you and gives the highest interest.

Other important issue to consider when deciding which saving account to put your money into is if your money is protected by the government or insured by the bank and to what amount.

Make sure you read and understand the fine print, and you are able by abide by the terms that will provide.