The "Bank of Dave" 5% Savings Interest? .. or not (What is this?)

chaotic_j

Hi guys,

Saw a small premises in Burnley town centre I hadn't noticed before the other day with the shop name "Bank on Dave" and big letters in the window proclaiming "Savings 5% AER*".

I didn't go in but I was intrigued and so I went on their website - http://www.burnleysavingsandloans.co.uk and I'm a bit confused as to what this is all about.

From what I gather it is an endeavour set up by a local businessman, David Fishwick who owns a company that sells minibuses.

The savings section of the website stipulates that an individual has to meet certain criteria to open a savings account with them, a "certified high net-worth individual" who holds net assets to the value of £250K or more not including property?

Can someone explain this to me please? Is this a pop at the banking system or something?

I also found out that this is to do with a Channel 4 series "Bank of Dave" http://www.channel4.com/info/press/news/dave-vs-the-banking-giants-channel-4-commissions-new-series

I found a news article as well, (well it's on the Sun website, so I suppose it's news in inverted commas!) http://www.thesun.co.uk/sol/homepage/news/money/3747394/Business-boss-will-show-fat-cats-how-to-do-it-with-own-bank.html and here on the Lancashire Telegraph website http://www.lancashiretelegraph.co.uk/news/9194011.East_Lancs_millionaire_to_launch__Bank_of_Dave_/

Just wondering if someone can explain this to me please (mainly the Savings high net-worth thing)?

Cheers in advance,
chaotic_j

Chrisblue1962

Sounds quite interesting.

I wonder how he's going to make a profit in 180 days, presumably by lending some people money at a greater rate than he's paying out....

I've just been on the website and wished him / them Good Luck stating that I hope they give the High Street Banks a "good run for their money" which would make a nice change from the Banks running off with our / taxpayers money!!!

Biggles

"I may not know much about banking, but I can't do much worse than they have!"

Hmm, really? We'll see. I think I'll give it a miss. I'd like 5% but I'd like it to be covered by the FSCS compensation scheme.

westy22

Basically, by certifying that you are a 'High Net-Worth Investor' you can access high risk investments not covered by normal FSA protection and /or guarantees. For example, to be a 'Business Angel' investor you have to complete such a declaration.

The usual wording is:

A High Net Worth Individual is a person who can confirm that the following definition applies:

I am a certified high net worth individual because at least one of the following applies -

(a) I had, during the financial year immediately preceding the date below, an annual income to the value of £100,000 or more;

(b) I held, throughout the financial year immediately preceding the date below, net assets to the value of £250,000 or more. Net assets for these purposes do not include -

(i) the property which is my primary residence or any loan secured on that residence;

(ii) any rights of mine under a qualifying contract of insurance within the meaning of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;

or

(iii) any benefits (in the form of pensions or otherwise) which are payable on the termination of my service or on my death or retirement and to which I am (or my dependants are), or may be, entitled.

Biggles

westy22 wrote: »

Basically, by certifying that you are a 'High Net-Worth Investor' you can access high risk investments not covered by normal FSA protection and /or guarantees.

That's understood.

But if I were investing in a 'high-risk' operation, I would want a great deal more than 5% to compensate me for the risk.

RetiredInThailand

If it looks like a scam and smells like a scam, it's probably a scam.

Am I right, Dave?

atypical

RetiredInThailand wrote: »

If it looks like a scam and smells like a scam, it's probably a scam.

Am I right, Dave?

I don't think many scammers broadcast their scam/face on national television.

westy22

I suspect that this is not a scam as such, but probably started with all good intent - the problem is that things may still go wrong due to 'circumstances beyond Dave's control'

Personally, I wouldn't put 10p in to take that sort of risk for 5%!

rb10

They do not appear to be registered with the FSA, presumably because they don't have the controls, liquidity and capital levels in place to meet with FSA regulations.

Given this, the restriction of only accepting deposits from HNW individuals presumably applies because these people are deemed to be able to check themselves that they are happy with the bank's financial stability, and make a more informed decision as to whether to deposit money. Non-HNW's generally would not check a firm's capital ratios, for example, before opening an account.

IronWolf

There are banks around just for high net worth people, but they dont offer good interest rates because they're usually far more cautious with the money, hence why rich people with a lot of cash choose to go with them over regular banks.

RetiredInThailand

atypical wrote: »

I don't think many scammers broadcast their scam/face on national television.

I've seen a fair few.