Lloyds Young Savers paying 0.5% APR

balloonist

I noticed my younglings savings account was paying 0.5% interest and not the 3% the bank staff told me.

It is an older account but it would appear older accounts are penalised with this below inflation interest rate. Not exactly encouraging a youngster to save, infact he is losing money!!

Bank being quite evasive, would not deal with the issue on the phone, had to drive to my nearest branch where I was told I had to make an appointment to discuss this with an advisor.

Well I have some advice for you Mr Lloyds and the money will be taken away from your trusted control!

ColdIron

Most of what you want to know can be found on their web site
http://www.lloydsbank.com/savings/young-saver.asp

It pays 3% on balances up to £20K and 0.5% on balances over that so you could still be getting the 3%. How much is there in it?

Is it still a Young Saver account? It reverts to an Easy Saver at 16 and that also pays 0.5%

balloonist

True, but if you search deeper you will find this:

Current rates – opened from 15 August 2011

Amount Invested Interest Paid Quarterly
AER % Gross % Net %
£0 - £20,000 3.00 2.97 2.38
anything over £20,000 0.50 0.50 0.40
These interest rates are correct as at 15/08/2011.

Interest rates are variable.

Previous rates – opened before 15 August 2011

Amount invested Interest Paid Quarterly
AER % Gross % Net %
£1+ 0.50 0.50 0.40
These interest rates were correct from 01/04/2009 to 15/08/2011.

His account was opened in 2000 and balance is circa £17k. Looks like they have two Young Savers rates

xylophone

His account was opened in 2000 and balance is circa £17k. Looks like they have two Young Savers rates

The interest rate was 3% when you opened the account?
You received quarterly statements?

When did you notice the interest rate had dropped?

If you provided the capital, were you aware of the £100 rule?

balloonist

Dropped the interest rate years ago but when bank staff told me that the account was earning 3% he started using it again. Staff obviously were not aware of the two interest rates for a Young Saver.

balloonist

I don't tend to study the statements but tend to rely on the staff's knowledge of their products. I noticed this just this week

balloonist

My question now is why two rates for the same named product and who else could have been duped?

PeacefulWaters

The 0.5% rate was the historic rate for older accounts.

They relaunched Young Saver three years ago with the higher headline rate for new accounts.

I believe the branch should be able to simply switch you over to the modern version. For reasons best known to Lloyds their call centres aren't able to deal with kids' accounts.

balloonist wrote: »

I don't tend to study the statements but tend to rely on the staff's knowledge of their products.

To be honest it's lax on your part not to check those statements. That said, they wouldn't have told you the 3% rate (which is best buy).

As for relying on staff knowledge you are being foolishly naive. They have dozens of current and legacy savings accounts with and without bonus rates and differing bonus rates at different points in time on differing tiers. There is no way any individual in that bank will be able to recall each and every interest rate, cut off date, tier, variation, quirk of T&Cs etc.

Apart from that they are low paid salesmen.

While there is an element of justification to your concern they have done nothing illegal, nothing in breach of any regulation and have merrily advertised the rate for new accounts on their web site for three years while writing to you every three months telling you the lower rate they're paying you.

xylophone

That said, they wouldn't have told you the 3% rate (which is best buy).

Well apparently they did - they just didn't check that the child's version of the account was actually paying it.

Dropped the interest rate years ago but when bank staff told me that the account was earning 3% he started using it again. Staff obviously were not aware of the two interest rates for a Young Saver.

When he "started using it again", did he/you check the rate being paid?

How old is the child now?

PeacefulWaters

xylophone wrote: »

Well apparently they did - they just didn't check that the child's version of the account was actually paying it

I was referring to the statements, not the staff.

balloonist

[QUOTE

When he "started using it again", did he/you check the rate being paid?

How old is the child now?[/QUOTE]

Child is now 13yrs now and checked with bank staff before reinvesting. Prior to that we took a sizeable sum out and invested with National Savings which offered a rate of 1% above RPI.

Two separate rates for Young Savers. Not exactly obvious that they were advertising the lower rate to their customers!!