Has your bank lured you into the savings trap?

banks show a high interest rate, then make a second issue showing a high rate whilst reducing the rate on the first issue. People, who are busy see the headlines and don’t realise the first issue has had it’s interest rate reduced. Why should the banks make a second or third issue on an investment other than to reduce the rate of previous issues. This is the banks taking advantage of investors and should be stopped.

Just checked mine (ING). 0.4% net, which isn’t great. Not worth moving it at the moment as all the money sat in there is for the wedding (1 month! eek!), so could end up in a muddle. Definitely on the list of things to do in the new year. Save and find an account with decent interest.

Why do I have to waste my time – and the bank’s time – opening accounts and closing them twelve months later? If everybody did that then surely the banks would stop this ridiculous merry-go-round.

They are all out to catch us – sign on – then – WHAM – down goes the savings rate. For my part I prefer to invest in shares, picking those with good dividends of around 6%. They can be cashed relatively easily.

All the advice about “vote with your feet” and “switch online” to get a better rate is fine in theory, but don’t forget the hassle when trying to open an account with a new provider. I have consistently found it a somewhat long and protracted process, particularly when ID is required. In one instance I had to get a solicitor verified copy of my passport, in another it necessitated a 40 mile journey to the nearest branch of the building society as they needed to see me personally. Even providers who boast their accounts can be opened on line, often subsequently ask for substantial ID documents before the accounts can be formally set up. In another instance, the process took so long that by the time the account was opened, the provider had withdrawn the account from sale!

I fully support the Which campagn on greater visibility of interest rates for savings accounts. When a years bonus is quoted it would be helpful to make it clear whether the year is taken from the date the bank/building society announces the product or the date at which individuals open their individual account.
With online accounts it would be very helpful if the current interest rate is included with the current balance information as well as with paper balances sent to holders. Without this infromation it is impossible to know when to move an account to another provider.

I agree with the comments already made – especially with Roger B and the Which? campaign. It makes my blood boil to have to keep tabs when each account has matured and then to go to the whole process of closing and opening new accounts. The costs involved in wasted time (for all concerned) together with this stupid bureaucracy must be astronomic – except, of course, for the banks who rely on lapsed accounts to make their profits. Banks are not interested in keeping and rewarding customers and I am never backward in telling them so face-to-face. But this cuts little ice. Shameful.

How about this one? I and my wife had 1 year fixed interest rate ISA at Birmingham & Midshire BS at 4.5%. It expired in January however I did not realise this. Several months later when I realised, I got in touch with them and asked what happened to my bond, I was told, because I did not give them any instruction they put it into another account which was paying very little. I got in touch with FSA and told them. They told me to send an email to which I believe was Royal Bank of Scotland the owner of B&M BS, This I did but did not receive an answer. Then I sent an email to B&M telling them about FSA. They answered and told me that, they are very sorry and that they are very careful but they made a mistake and they did not inform me when my bond matured. Funny but they did not inform my wife either. So I demanded that the total amount should be updated to the present day at 4.5% both for me and my wife and add £25 per account for my troubles. They agreed and paid. So one should be careful about maturing fixed rate bonds!

conned by the banks
conned by the mortgage companies
conned by ISA providers
conned by the whole life bond sellers
conned by the pension schemes

it is theft and theft is a crime so is it not time all these people were held to account ?

Having been alerted by Which? to this practice some while ago I now change savings accounts every year and put a reminder in my diary/calender to check the rates the following year. Some providers, on request, will transfer the savings to their new/best rate account but if not I transfer it to another provider with a good interest rate. It’s a slight hassle but better than being conned.

At one time banks were criticised to make it difficult to change accounts.This was stopped, or at any rate reduced.

Then they discovered identity checks!

The current identity checks intended to prevent money laundering, with the onus on people to prove their innocense, are unlikely to deter real criminals. They spread fear and distrust and put citizens at risk of identity theft. They discourage honest people from making financial transactions, and from consulting professionals.

Even when no money is to be transferred many professionals demand intimate personal information that could make fraud easy if it found its way into in the wrong hands. The regulations also put solicitors, accountants and other professionals and their staff and families at risk of personal violence if they do come across real criminals and report them.

People who do not travel, do not drive, do not own a shotgun, and are not legal immigrants can only prove their honesty for the three months of the year after they have received a tax return form. If they are not taxpayers either, then they have no “identity” at all. Many women are unable to prove themselves simply because the household utility bills are in their husband’s name.

Citizens can also be required to travel to town centres and pay solicitors or other professionals to make a certified copy of their passports or driving licenses. This is a stealth tax, both to supplement the professionals’ income and also boost VAT and give a false impression of added value within the economy. Taken over the country as a whole, this is a substantial “carbon footprint” and adds to traffic congestion – something the government is supposed to be working to reduce.

Government agencies have plenty of data about people on electronic records, particularly with regards to tax, health and benefits. Instead of making citizens put themselves at risk over this, a system should be employed where checks can be made electronically to ensure that people are who they say they are and that their addresses are genuine. This is something the government wants, so there should be no charge to citizens. If it is something that the EC wants, then any costs should be met from the EC’s funds.

How much has identity theft crime increased since citizens have been told to prove their identities like this?

How much evidence is there that these regulations have reduced other crime?

My Dad is a pensioner, his savings earn him 0.5%, yet the bank will let him borrow for just 20%. This is scandalous! The banks should be paying a fair percentage on savings, after all they are using savers cash to lend and speculate.
He asked me if I knew of a co-op, where savers had got together and started their own investment bank. Couldn’t consumers start a class action against banks to force them to pay a fair return on their savings that are in effect being lent to the banks.

I opened an investment account with Tesco finance at 2.7%.Checked online this week to see that I am still getting this and found that in May it changed to 1% and as from August a new one at 2.8% had been introduced.I have closed the account.Isnt this the same depressing story we are hearing all the time.I thought perhaps Tesco might operate more ethically,but clearly had seen how much money could be made by ripping people off and wanted part of the action.NO they did not inform me that they had done this.

I am amazed that so many people are so careless with their precious savings. When an interest rate is clearly advertised as having a certain bonus for 12 months is it so much trouble to make a note of the date and check? I have several accounts, all of which have clearly informed savers at the outset that the interest rate will revert to a lower figure after a certain date and think it is up to me to watch my money.

The points made about interest rates are absolutely right but the reality of the impact on most people is 50% of not much. With interest rates so low an increase of 1% on your rates if you can achieve it will only yield £10 a year per thousand so unless you have a six figure sum to invest (some chance for most of us) you probably won’t notice a significant change in your lifestyle compared to the hassle of the ludicrous bureacracy often involved in setting up a new account. The money laundering rules now seem to affect anyone but criminals and terrorists financial transactions.

Much more invidious and scandalous is the incestuous relationship between Government and moneylenders or so called investment fund managers. A good example of this is the fact that pretty well all of the investment fund managers/banks are legally able to insist you investing pension funds with them through a so called financial advisor, thus ensuring yet another ‘prophet’ gets a slice of your money in commission for doing not much……

When discussing possible alternative accounts recently with our local Alliance & Leicester (Santander) advisor, I was told that, if you took out a certain investment a/c, your money was totally inaccessible for the duration of the term (in this case 2 yrs). In other words, the bank took your money and, whatever your subsequent personal financial circumstances during the term, you could not access any part of your own money, at any time, throughout the term. With most accounts you pay a penalty (e.g. loose interest etc). I questioned whether this was legal – and whether banks were permitted to deny a customer’s access to their own money as this as seemed very close to theft – however much it was dressed up in financial jargon. The adviser couldn’t answer, so he rang ‘head office’. They couldn’t seem to give a coherent answer to the question either!

Just used the savings booster tool to find that my postal ISA with Santander is earning 0.1%. I also have not had a statement from them since 2008…. I am shocked and disgusted but not at all surprised. We banked with the Abbey for years but left because they were so so so unbelievably rubbish and unprofessional. I am now looking for somewhere new to put my languishing cash.

I have recently opened an E savings account with Natwest it has a fixed rate for 12 months , so after 12 if it wont match the rates that are around then I will ditch it. It is important to make a note of when it expires because Natwest wont tell me. I find it a hassle to keep changing but with rates dropping after a set priod it is the only sensible thing to do. Banks are the only institutions that get rewarded for failure, any other business would just go to the wall, and after a lot of hot air from politicians it doesn’t seem to me that things are likely to change for the better for savers.

When interest rates were 4-5% or more, the inclusive 12 month bonus was usually a small proportion of the total, perhaps 1%. Now I notice the interest rates that banks are offering are made up almost entirely of the 12 month ‘bonus’. For example Santander’s Esaver Issue 2 offers an interest rate of 2.75%, but 2.25% of that is the 12 month ‘bonus’.

I have discovered a Halifax ISA I have had for ten years is now paying 1% and has been for 4 years. I stopped receiving statements presumably because the account was deemed ‘inactive’. I have been on the phone trying to resolve but my phone ~( which is rubbish ran out of juice after half an hour) The last thing I asked was why an inactive account was deemed to not deserve interest. What a farce. Obviously not moved on since this was written.
Might as well have reduced mortgage by that amount over that time.

Last year I phoned Lloyds TSB to review my ISA Account rate as it had come to an end – they were very helpful and even increased the rates on my other savings accounts. Fantastic! This year, I phoned Lloyds and asked them to review my interest rates. Complex, load of spiel – fast, incomprehensible and a complete waste of my time. In the end I told them to forget it – won’t be going through that again in a hurry. 12 month review? No thanks. What happened to variable rates on accounts – now it’s “we’ll give you little percent for a year followed by no percent so you have to ring us up and give us all your personal details”. Totally hacked off with my bank once again. Who are the idiots who make these decisions? Feel sorry for the staff who have to deal with the backlash.