UK savers with money trapped in accounts with Icesave, the Icelandic bank, should be fully refunded by the end of November, according to the Financial Services Compensation Scheme (FSCS).

The FSCS last week began a phased compensation process for 10,000 customers last week and has so far transferred more than £250m to savers.

Depositors are being contacted by email and invited to log on to a modified Icesave website to check their funds and enter details that will enable the FSCS to move their savings into a nominated account. The transfer should take no longer than five days.

The UK government has guaranteed all deposits from savers with Icesave, including those above the official compensation limit of £50,000, and has made £800m available to the FSCS to cover the repayments.

Around 230,000 UK customers have money in an Icesave accounts, which offered higher interest rates than many competitors.

UK customers will be refunded the full value of their savings, including any interest earned up until the end of the day on October 7, when Landsbanki, the owner of Icesave, was nationalised.

Savers who took out fixed term deals of up to three years have been offered the chance to leave their money until the deal matures, or transfer it now and forgo the full interest benefits.

Money will be transferred to accounts used by savers when they moved their funds to Icesave. If these accounts are no longer open, or if funds were paid in via a cheque, customers will be required to fill in a paper form. The FSCS said these customers would not receive their money as quickly as those using an electronic transfer.