bradford and bingley 10% con???????

MarkyMarkD

All of this is rather getting away from the original post's point.

Regular Savers are not good for people with lots of money - unless they want to open loads of the things, which (for them) represents a degree of effort which they may choose to expend elsewhere.

I can't see how anyone reckons that they are not good for people with little money, struggling to make savings on a regular basis - their intended target customers. Such people get the declared interest rate, on the amount they are able to save monthly, and they lose interest (generally) if they fail to deposit monthly or withdraw the money early, hence providing an incentive to stick with it for the full term. That is a good thing for those customers as it encourages the savings habit and rewards it accordingly.

Obviously the institutions which offer these accounts at loss-leading interest rates are doing so with the view to building a wider customer relationship. But for Albertross to claim they are intended to mislead is, IMHO, completely wrong.

If any institution is asked how much interest the customer will get by depositing their £100 for 12 months, I would expect them to give the correct answer. If the customer can't understand that £100 a month for 12 months at 10% doesn't equal £120 in interest (and doesn't ask) then, again IMHO, that's their own fault for not applying common sense to the calculation.

If, as the OP actually stated, they were told how much interest to expect and this was incorrect, that's a completely different scenario and it is quite right that B&B should be held to account. But somehow I doubt anyone said "you'll get £120 in interest when you close the account".

MarkyMarkD

I still don't agree. It isn't "small print" for a regular saver with an interest rate of 10% to mean that 10% is paid on the daily balance on the account.

Interest on every sort of savings account is paid on the daily balance on the account. There's no reason why regular savers should be any different.

They simply aren't misleading except to those who have so little understanding of financial matters that they can't understand that you don't get paid interest on money which isn't in the account.

Introductory bonus rates are a separate matter outside the scope of this thread, don't you think?

masonic

albertross wrote:

None of these accounts are technically misleading, because all the small print is there when you sign up. Intentionally confusing is probably a better description.

You keep asserting that these accounts are confusing, but what proportion of accountholders do you suppose did not understand how these accounts worked when they opened them? 2%? Less?

There is always a minority of people that do not understand even the simplest of things. Everyone has their particular strengths and weaknesses, but it's not fair to blame the banks for that. The majority of people would no doubt be very upset if these accounts were not around.

masonic

albertross wrote:

I won't continue the point, but the fact so many people on here misunderstand the amount of interest they are going to get with a regular saver, tells me that the marketing department is succeeding in their aims when they put the 10% in big letters, and the aer in smaller ones, rather than the other way around. The difference between the 2 is more significant with a regular saver, because of the limitations of the account.

Eh? If interest is paid annually (which it normally is) then on a 10% regular saver, the AER = 10%, isn't it?

masonic

albertross wrote:

I suspect your 2% is a gross underestimate.

And there I was trying to be generous!

Edit: And just to clarify, I was referring to 2% of regular saver accountholders, not 2% of the population. I expect most people neither know nor care of these accounts.

masonic

albertross wrote:

Don't you start with the small print:D

Going totally O/T now, but this discussion reminded me of this:

http://www.youtube.com/watch?v=Gp0HyxQv97Q

Noooooooo! Not that again!! :mad: :mad: :mad: :mad: :mad:
<reaches for valium>

masonic

albertross wrote:

There is another one as well, but I won't post it, if it upsets you.

No, Ijm fine noww. Pleashhe feul free tooposetit <thud>