beware saving with the leeds bs

davebown · 3 March 2007 at 12:03PM

I had just under £7000 invested in march 2001 in a capital 7 shares account with the above
i left the share account untouched till yesterday and went in to put some more money in the account
I was told that the capital share account scheme had been closed and my money was tranferred to a dormant account
and when I inquired how much interest i had earned on average year on year i was told it was just 1.95%
in effect with inflation at approx 2.3% the money invested in the leeds since 2001 in real terms is less today than it was in 2001
beware entrusting your money in this bs!
i was told that when the account was closed it would have been noted in the general annual meeting report !! (what normal indinvidual reads them)!
which is send out but that the Bs cannot afford to send out individual notices
thats how The leeds BS looks after its Customers
and you wont find that in any brochures enticing you to put your money with them

cheers

tom188 · 3 March 2007 at 12:40PM

I think most of the blame must lie with you for not monitoring your money. What you describe is industry standard practice, and as you say they had informed you in their report and you chose not to read it or check the rates at any time. The rate you have been paid has been poor but is still higher than many accounts in the savings account universe.

If you had opened a liquid gold account with halifax in 1984 it was a best buy paying 13.21 per cent against a Bank rate of 10.5 per cent. It now pays 0.96 per cent against a bank rate of 5.25%.

There are very few accounts that remain market leading for much longer than a couple of years, and you should expect to have to move your money at least this often for best returns.

Leeds building society are currently offering a 6.25% (to 31/12 then reverting to 5%) account to existing members.

playful_2 · 3 March 2007 at 2:49PM

Have you a link to this 6.25% account?

cheerfulcat · 3 March 2007 at 3:19PM

Here it is - Member Loyalty Saver

davebown · 3 March 2007 at 5:00PM

I understand that it industry standard but does that mean its acceptable?
plenty of industries have standards that are now not acceptable
look at the Current controversy over the overcharging on overdrafts by the banks that was industry standard for years
at the end of the day i have entrusted my money to this Bs to look after my money and it is worth less than when i put it in!! ( in real terms)
Where in any of the Glossy Brochures does it tell you that if you dont manage your account regularly it could end up worth less than when you put it in!! lol

the least they should do in all cases is revert to variable rate not to penalise long term investors to gain high short term captivating rates to induce more investors

If this is industry standards then the industry standards are long overdue for overhaul and cha

StevieJ · 3 March 2007 at 5:15PM

I agree with you db, it is sneaky, underhand and deliberate. If they change the terms of your investment they should inform you directly and ask you what you wish to do with it, or at least return your funds. I personally consider this practise a whole lot worse than the so called 'unfair charges'.

tom188 · 3 March 2007 at 5:30PM

Interestingly the capital 7 is in fact still available to new money, and is not a closed issue
http://www.leedsandholbeck.co.uk/savings/capital_7.html
it is however a variable rate account and the interest rate can go up and down. These accounts are expensive to run compared with say an online account and it is only fair that those who hold them pay more (through reduced interest) than those who do not require branch access etc. As people switch to more efficient ways of banking the cost of running the remaining old style accounts will go up. If you were to look at the market rate for similar accounts you will find it similar to what Leeds was paying you.

The average savings rate in december* was 3.56% gross, 2.85% net and inflation was 3%, so after tax money in an average rate savings account was devaluing. There is no condition (with the exception of index linked saving certs) that money on deposit will not devalue through inflation as this is variable that is not within the control of the financial institution.

*source BBC

playful_2 · 3 March 2007 at 8:00PM

Just missed out on the Member Loyalty Saver account by 2 weeks!

davebown · 4 March 2007 at 8:31PM

where you aware of the membership loyalty scheme through the leeds BS

davebown · 4 March 2007 at 8:38PM

tom u have still totally missed the point and have replied as a defender of the system which is are you by any chance employed in finance sector?
if the capital 7 share scheme is still operative to newcomers are they offering 1.95% or are they offering a better rate than that and if so why ? why shouldnt people already in the scheme not be paid the same rate?
to me ir gets murkier and murkier!!!

davebown · 4 March 2007 at 8:40PM

i see their offering the same rate to newcomers!!! ill bet nobodys buying em!!!

beware saving with the leeds bs

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