Halifax Guarenteed 10% Savings Question

RayWolfe

It is, I've seen it here.
As I said earlier, it's a lack of education that means that people just don't understand sums. But then I can't spel

PinkPig

I really don't think that there's anything else the banks can do to make this clearer. Any account pays interest on the money that's been deposited in them. There's absolutely no sensible reason to think that a bank would pay you 10% of the current balance - interest is calculated on the basis of how long the money has been there. Nothing else would make any sense at all.

An account paying 10% was still a very good deal. You haven't been "conned" or "ripped off" in any way at all. Obviously you misunderstood - but, frankly, you misunderstood in a way that would make the terms of the account ridiculous and implausibly generous. You made 10% on the money that was in the account. It's not "equivalent to having an account paying 5%" - if you paid the same amounts at the same times into an account paying 5% you would get half the interest.

Now lets be clear, a regular savings account isn't quite for everyone. In general there are two types of people who should open one:

1) People who wish to deposit only savings that they get monthly - ie. a proportion of their salary. This is the target audience.

2) People who have a lump sum and are happy to transfer it slowly and monthly, but crucially, who have *another good savings account* to keep the rest of the money in before it's transferred.

The only time that you're doing badly with these sorts of accounts is if you have a lump sum, transfer it slowly and monthly, but (foolishly) keep the rest of the (untransferred) balance in a current account, or a bad savings account - or in anything other than the top-paying "standard" (ie. instant access and no restrictions on deposits) savings account.

Just to point out to the OP - it was still *completely* in your interests to deposit as much money as possible into the regular savings account paying 10%. It pays a better rate of interest than you could ever have got elsewhere.

I get very frustrated by people who complain that they've been "conned" by regular savings accounts, because in the end the only result could be that banks stopped offering them, which would be bad for everyone.

Now please don't think I'm trying to be evil here - I understand that many people find financial products confusing. However I think that the vast majority of people who feel upset seem to have been expecting miracles. The idea that a bank would ever consider paying someone interest on the "maximum balance over the year" rather than the actual balance simply doesn't make sense. I'm very sorry that you misunderstood, but it really is just a misunderstanding.

giger

I can see how if you take it at face value it might be misleading, but as mentioned, how can you expect to earn x % on the total amount you invested when that money may have been their only a few months. It would be the same as putting £5k in to an account account paying 10% in month one, and expecting to get £500 interest in month two. It simply doesn't work like that.

All accounts work the same way in this respect and there are lots of savings calculators on this site which will help you work out the interest.

With anything financial you really do need to ensure that you understand the product before comitting to it.

RayWolfe

giger wrote: »

With anything financial you really do need to ensure that you understand the product before comitting to it.

Not just financial products. If you don't know how to open a tin of beans, it's a pretty daft purchase.
(And nowhere on a tin of beans does it say "You need a tin opener to fully enjoy this product".)

Now that MUST be mis-selling!

ctdctd

RayWolfe wrote: »

(And nowhere on a tin of beans does it say "You need a tin opener to fully enjoy this product".)

Ah, but on the new fangled ring pull ones they have printed the instructions on the lid - maybe they got too many returned un-opened:D

Dunwunderin

Hi'

my Halifax 10% saving plan matures this Thursday and hope to get £6300
before tax.

Current Halifax offers only 4 % and Halifax WebSaver is a total disaster(default account).

Any ideas how to invest efficiently in the present economiic climate?

masonic

Dunwunderin wrote: »

Any ideas how to invest efficiently in the present economiic climate?

I think it's really a case of holding on in instant access accounts in the hope that rates improve soon. Otherwise, you could lock your money in long term fixed rate accounts if you think rates will stay low in the future.

King_Weasel

RayWolfe wrote: »

Not just financial products. If you don't know how to open a tin of beans, it's a pretty daft purchase.
(And nowhere on a tin of beans does it say "You need a tin opener to fully enjoy this product".)

Now that MUST be mis-selling!

At least a tin of beans has a picture of the beans on it.

I bought a tin with a baby on it, but was disappointed.