Many savers being fooled by Internet savings accounts

According to a recent report from This is Money, many savers across the UK are being tricked into parting with their hard earned cash by seemingly tempting high interest Internet savings accounts that look far better than they actually are.

A number of Internet savings accounts, some from big name banks such as Alliance and Leicester or the Abbey, are offering eye-catching interest rates that have got consumers flocking to open up an account. However, experts state that there is a massive sting in the tail.

What many consumers are failing to realize is that many of these accounts will only pay this rate of interest in the event that the money in the account remains untouched, and just one withdrawal from the account could seriously impact on the amount of interest that you receive. For those that do make withdrawals the interest rate is docked to the point where it falls behind many of the best buy savings accounts on offer at present.

The highest paying of these seemingly high interest savings accounts is Coventry Online, but industry officials state that even if you did open an account and did not make any withdrawals you would only receive 80 pence more for each £1000 of savings than you would with the ICICI Bank’s HiSave Account, which is currently Money Mail’s best buy savings account.

Consumers that are hunting around for a place to put their savings are urged to ensure that they read the small print with these Internet savings accounts, and do not jump in feet first based just on the eye-catching interest rates that are advertised, as the amount of interest that is received may not be close the interest rate advertised.

Tom Smith
5th December 2007

Tags: earn, rates, interest, attractive, deposits, introductory, savings, high

Government plans to ‘nationalise’ Northern Rock

The government has made plans to effectively nationalise the struggling bank, Northern Rock, to protect its customers, it has been claimed.

Already, the Bank of England has loaned £23 billion to the bank, following a run on deposits – the first run on a British bank in many years.

In addition, the Treasury has promised to underwrite 100 per cent of all deposits in the bank, a commitment worth another £20 billion.

Although a number of companies are bidding to take over Northern Rock, Thisismoney claims to have learned that the Treasury is preparing plans to take the bank into public ownership.

Last night, chancellor Alistair Darling announced that the government will soon publish a statement on the principles affecting any takeover – which will give a critical insight into whether nationalisation, formal or informal, is likely.

In a letter to the chancellor, acting Liberal Democrat leader Vince Cable complained: “We are now in an absurd situation where banks can take ludicrous gambles with their customers’ money, knowing that if it all goes wrong the taxpayer will bail them out.”

Tags: situation, Banking (Special Provisions) Act, banks, deposits, liberal democrat leader, run, taxpayer, Alistair

Banks must keep customer more informed states BBA

The British Banker’s Association has recently stated that UK banks need to do more to keep their customers informed on all levels when it comes to the services and product that they offer, as well as when it comes to any changes.

A senior official from the British Bankers’ Association stated that banks need to buck up their ideas in terms of keeping customers informed. This comes at a time when reports indicate that consumer confidence in the banking and financial sectors has plummeted.

 According to the Chief Executive of the British Bankers’ Association, Angela Knight, banks in the UK need to keep their customers far more informed in terms of banking issues. Ms Knight stated that the increasing complexity of the banking industry as a whole meant that banks needed to be far more informative with their customers. She said that banks needed to be more open and informative in terms of their procedures, and that better explanations and increased security was required from banks.

Although one recent report is said to have shown that many consumers are satisfied with their bank, another study has shown that the confidence of consumers in banks and building societies, as well as other areas of the finance sector, has taken a real hit as the result of chaos and turmoil in the money markets and the recent problems seen at Northern Rock, where many savers were in fear of losing their money resulting in the mass withdrawal of over £2 billion.

Another issue that has affected consumer confidence and satisfaction when it comes to banks is the recent controversy over bank charges, which is due to come to a head early next year when the Office of Fair Trading takes the banks to court in a test case to determine what can be construed as a fair fee.

Tom Smith
4th November 2007

Tags: information, consumers, Banking, bank, funds, deposits, societies, money

Three billion barrier smashed by Icesave

In a recent announcement Icesave, which only launched in October 2006, has revealed that since its launch it has taken over three billion pounds in deposits and has opened over eighty thousand savings accounts.

Part of Iceland’s Landsbanki, Icesave officials feel that the combination of easy, convenient online savings management along with highly competitive interest rates has helped to secure this level of success in such a short period of time.

Icesave has been offering interest rates in nearly six percent to savers, with a minimum account balance of £250 and a maximum of £1000,000. There is no penalty of loss of interest for withdrawals on the accounts, and all that is required of savers is for the account to have a t least £250 in it at all times. Those wishing to open an account with Icesave must be over the age of eighteen.

On the other hand the Dutch bank ING has seen around £3M worth of deposits withdrawn from its operations after failing to pass in interest rate rises to savers. Although ING is planning to pass on the latest interest rate rise in June, the interest rate has been stagnating at under five percent for some time, which has outraged savers, many of whom have decided to try and open accounts elsewhere in order to get a better rate of interest.

One official from the online savings operation Icesave stated: ‘In achieving this new milestone of £3bn in total deposits, Icesave has shown Landsbanki’s ability to diversify its balance sheet and develop its proposition in the UK market place.’ 

Icesave has guaranteed customers that the AER on savings accounts will exceed the Bank of England base rate by at least 0.25% until 2009.

Tom Smith
7th June 2007

Tags: interest, icesave, deposits, savings, earn, increase

Find the right savings account for your holiday savings

As the festive period disappears and Spring approaches many people in the UK start thinking about saving towards their summer holidays. If you are looking to start putting some money aside to fund your annual holiday in 2007, it could really pay to shop around a little and find a savings account that will make your money work harder for you. There are many different savings accounts available these days, and the interest rates on offer can vary dramatically. Depending on how much you will be saving this could make a big difference to the amount that you earn in interest.

The type of saving account that you opt for will depend on a number of factors, such as the initial deposit that you can make, the amount that you intend to put in each month, and the level of access that you require to your savings. You will find a choice of savings accounts, some of which require a certain period of notice in order to make a withdrawal without penalty and others that offer instance access. Some require a minimum initial deposit of just one pound whereas others require more, and some want to see a regular minimum amount going in each month, whereas others will accept deposits as and when you can afford them.

Amongst one of the highest savings account interest rates on offer is the Alliance & Leicester savings account, which offers twelve percent AER on its regular savings account. Choosing the right savings account for regular savings can make a big difference to the amount you make on your deposits, and consumers can quickly and easily compare the different savings accounts available, along with their interest rates and terms by going online. This is the easiest and most convenient way to see at a glance which of the UK’s savings accounts will best suit your needs and give you the best return on your deposits.

Tags: deposits, interest, return, bonus, bank, online, aer, earn