New banks from foreign shores are tempting savers with top rates of interest on internet accounts. Kaupthing Edge is owned by Icelandic Bank Kaupthing and its UK subsidiary Kaupthing Singer & Friedlander. ICICI Bank UK, a subsidiary of the huge Indian ICICI Bank, operates in 18 countries and has 24m customers worldwide. FBN (UK) Ltd, whose account, under the brand name FirstSave, is also in the best buy tables, is a subsidiary of First Bank of Nigeria. With all three banks the money in your savings account always stays in the UK and is invested mainly in cash and short-term bonds - or near cash - to finance the bank’s UK business. Your money will not end up in Nigeria, India or Iceland. Given the distinctly dodgy reputation of some Nigerian operations - it is the home of internet fraud and corruption is rife - this should provide reassurance to anyone considering FBN’s account. Savings in any of these three banks are covered by the UK’s Financial Services Compensation Scheme (FSCS). If any of these banks go bust then you can claim up to £35,000 per person per bank as they are all fully authorised by the FSA.
Posts Tagged ‘FSA’
Just how safe are overseas banks?
Thursday, February 21st, 2008Newcomer Kaupthing offers 6.5% to online savers
Tuesday, February 5th, 2008Icelandic-owned Kaupthing Edge, an online savings provider, has become the latest foreign bank to launch an account aimed at British savers. The instant-access savings account which pays 6.5% gross rivals that of ICICI Bank’s HiSave account at 6.41% (which has stayed at the top for a long while). Savers must first open the instant-access account with a minimum of £1,000 before they can take advantage of Kaupthing’s fixed rates while ICICI HiSave only requires £1. It also offers a six-month fixed-rate bond at 6.8% gross and a 12-month fixed-rate bond at 6.86% gross. Kaupthing is regulated by the Financial Services Authority and as such savers’ cash up to £35,000 is protected under the Financial Services Compensation Scheme if the bank were to run into difficulties. Kaupthing also guarantees that the rate on its instant-access account, which is variable, will not be less than 0.3 of a percentage point above the base rate until February 2012.
