Is the money safe in icesave or Kaputing bank or any other foreign bank up to the amount of £35000.

Hi Ranjit,

Both these banks are covered by the Financial Services Compensation Scheme (FSCS) so your money, up to £35,000, is safe. However, the way they are covered does differ and this could have a bearing on you should you find yourself in a position to have to make a claim (ie one or both of these banks goes bust).

Kaupthing Edge is fully regulated by the Financial Services Authority (FSA) - therefore 100% of your first £35,000 is covered by the FSCS.

However, Icesave is only partly regulated by the FSA. This means that, if you needed to claim, you would receive part of your compensation from the Icelandic compensation scheme and part of it from the FSCS. So, although you would get all your money (up to £35,000) back it would require you to claim through two different organisations.

This difference is exlained in more detail in this recent article "Are your savings protected".

Also, it's worth bearing in mind that Parliament is currently reviewing the way savers' money is covered by the FSCS and one proposal on the table is changing the rules so savers only have to make a claim once, regardless of the bank they are with.

Again, to find out more about the proposals read this recent article "Savers' money still at risk"

I hope that helps - it is complicated, which is one reason the government is keen to change the rules!