Barnsley was forced to merge with Yorkshire Building Society after £10M it had deposited with two Icelandic banks, Kaupthing Singer & Friedlander and Heritable Bank, was feared lost.
However, as per the Telegraph, it promised that any money it recovered from the banks' administrators would be returned to its savers and borrowers. Approximately £8.8M has been recovered.
Barnsley's savers will receive 3.31% of their total savings balance held with the society on October 21 2008, subject to a minimum of £25 and a maximum of £5,000. Borrowers will get a flat payment of £250, although all payments will be taxed at source. Approximately 28,000 account holders will benefit.
To qualify for the windfalls, savers and borrowers are required to have maintained continuous membership between October 21 2008 and October 21 this year with one or more of the brands in the Yorkshire Group, which also includes Chelsea and Norwich & Peterborough building societies and Egg.
The payments are expected to be completed by 21 December, just in time for Christmas.