Are my savings safe wth Icesave?

I have a Cash ISA with Icesave, but am concerned whether my savings are safe with Icesave following the merger of Halifax and Lloyds, collapse of AIG and Lehman Brothers.

Given Icesave is not a UK bank, are my savings safe with Icesave and what level of protection is offered?

Would I be better to switch my savings from Icesave to a UK Bank?

Andrew,

Icesave offers UK savers the same level of protection as any UK registered bank and building society. Icesave are what's known as a European Economic Area ("EEA") Bank, and they have topped up into the UK's financial services compensation scheme, which means you'll get the same level of protection as you would do if you had your savings with a UK bank, up to the current level of £35,000.

For EEA banks like Icesave the financial compensation scheme is provided by two separate schemes e.g.

The Icelandic Depositors' and Investors' Guarantee fund provides the first level of protection up to 100% of the first €20,887 (or Sterling equivalent); and the UK Financial Services scheme tops up your protection so that under both schemes your protection is equal to 100% of the first £35,000.

What about Kaupthing, are they covered as well???

Kyle,

Kaupthing are another EEA bank who have topped up into the UK Financial Services Compensation scheme in exactly the same was as Icesave have. The other popular non-UK banks that have also done this include Bank of Ireland, Anglo Irish and ING Direct. This means that Icesave, Kaupthing, Bank of Ireland, Anglo Irish and ING Direct offer savers the same level of protection (currently £35,000) as every FSA regulated UK Bank and Building Society.

You surely know that ICESAVE offer a Savings A/c paying over 7% p.a, with a Monthly-paying facility equal to 6.84% p.a. Is there some reason that you do not show it?

The Icesave product you are referring to is a Fixed Rate account and is therefore shown in the Fixed Rate Savings - Short Term table.

http://www.moneyfacts.co.uk/savings/bestbuys/short-term-fixed-rate-bonds.aspx