The Financial Services Compensation Scheme (FSCS) has announced that UK depositors in Icesave will receive two emails, the first of which, planned for this week, will explain the electronic compensation process which will all be conducted online.

The second email, which will be sent in stages to manage the flow of payments, will offer further instructions on how to complete the transfer process, with hopes of starting compensation payments in the second week of November.

Once the process is complete, the money should be in the nominated accounts after five working says using the BACS system (Bankers’ Automated Clearing Services).

The compensation plans have yet to be finalised by the FSCS, but will come as welcome news to Icesave customers, drawn to the online savings account by market leading interest rates, who previously feared they would never see their total £4billion in savings again after the Icelandic Government said it would not be able to honour the UK’s depositors when the bank was nationalised in October.

The FSCS ordinarily guarantees up to £50,000 of each person’s savings accounts, increased from £35,000 when savers started to panic about the safety of their deposits and frantically withdraw their cash, adding to the turmoil in the financial system.

But under a Government guarantee, Icesave customers will get all their money back, plus any interest which is due, up to October 8, the day the bank was declared as being in default.

FSCS urges Icesave customers who have not received an email by close of business on Friday November 7 to contact them on 0845 7300 131.

© Fair Investment Company Ltd