Oh dear. Last week, as everyone fretted about losing their life savings with bans teetering on the brink of collapse around the world, The Guardian championed those that were upping savings rates to attract customers, by suggesting a list of the ten best savings accounts.
Top of their list was the Icelandic internet bank Icesave and their "easy access cash Isa":
The glory of the cash Isa is that it allows you to take all your returns free of income tax. If you leave your money in a standard savings account, the interest you earn will be taxed at 40% if you're a top rate taxpayer, or 20% if you're a basic rate taxpayer. Not so in a cash Isa. A top-rate taxpayer earning 6% in a cash Isa is getting the equivalent of 10% gross, while a basic rate taxpayer gets 7.69%. You can invest up to £3,600 a year, and many cash Isas allow you to transfer in previous Isa holdings to help you get a more competitive rate.Icelandic-owned bank Icesave's Easy Access Isa currently pays a variable 6.1% on £1,000 or above
Alas, a week later as Iceland's economy cratered, Icesave's parent company Landesbanki has been nationalised by the country's government. Though the move has guaranteed the savings of Iceland residents with accounts in the bank, non-national internet savers have been left in limbo. Customers were today greeted with a message on the bank's site informing them that the bank was not currently processing any desposits or withdrawals from internet accounts. Which is nice. It's unclear when this situation will change.
Oh well. Here's hoping not too many people took The Guardian's advice. At times like this it's best to just watch the bank run scene from It's A Wonderful Life and hope for the best. Altogether now, "The money's not here. Your money's in Joe's house that's right next to yours. And in the Kennedy house, and Mrs. Macklin's house, and a hundred others..."
//At times like this it's best to just watch the bank run scene from It's A Wonderful Life and hope for the best.//
You could also follow the latest developments on my blog - http://bankrunwatch.blogspot.com - your bank my be next.
Posted by: bankrunner | Wednesday, 08 October 2008 at 10:16 PM