/ Money

Gold and platinum accounts – how looks can be deceiving

A white horse painted like a zebra

Savings accounts with names like ‘Extra High Interest’, ‘Midas Gold’, ‘Extra Special’ and ‘Triple Gold’ all sound promising, don’t they? But then you see the paltry interest rates on offer, and they’re all a bit of a let-down.

Take NatWest’s sparkly-sounding Diamond Reserve savings account, paying just 0.1% interest. So, for every £100 you save, you’ll get just 10p in annual interest.

On a similar theme, First Direct might implore you to ‘sit back, relax, and let the rewards come to you’ with its Bonus Savings account. But don’t get your hopes up – even if you don’t make any withdrawals, you’ll also get a rate of just 0.1%. And if you do need to take some money out of your account, your rate will halve to just 0.05%.

Overpromise and underdeliver

Here are my top five savings account names that sound far grander than the rates they deliver:

  • Danske Bank pays a slightly higher, but still paltry 0.1% on its Midas Gold account
  • NatWest’s Diamond Reserve also pays 0.1%.
  • Dudley Building Society’s Extra Special account pays 0.05%
  • First Trust Bank (NI)’s Cash Stash also pays 0.05%
  • Cambridge BS pays 0.05% on its Instant Sapphire account

There are some grandiosely named savings accounts that are less stingy if you’re able to save more. For example, the Extra High Interest account from Julian Hodge Bank pays just 0.1% interest on £1,000, but a more respectable 2.7% on a balance of £10,000. Halifax/Bank of Scotland’s Extra Income Saver, on the other hand, only boosts its rate from 0.1% to 0.13% for balances of £5,000-£25,000.

If it sounds too good to be true…

Many of the savings accounts that pay insultingly low returns used to pay more once upon a time. For example, in September 1997, the NatWest Diamond Reserve account was paying 4.59% AER, while the Halifax Liquid Gold account paid 3.7% on balances of £3,000. Neither matched the best deals available at the time, but they were far better than the current advertised rates of 0.1% and 0.05% respectively.

While the oxymoronic account names are quite funny, there is a real risk that savers could be misled by a product’s glitzy-sounding label. This is particularly true where these accounts once offered good value. The new regulator, the Financial Conduct Authority (FCA), needs to clamp down on misleading product names, and providers need to offer fairer interest rates or withdraw their products.

Have you spotted any savings accounts where the bling name isn’t matched by the reality?


I don’t see this as a real problem, since no-one is likely to open an account if the interest rate is very poor. What concerns me far more is savings accounts and ISAs that give a decent rate of interest but this becomes derisory when a new account is launched. It is legal, very unfair, and extremely common.

If HTC, the mobile phone company, was to move into the financial sector I’m sure they could come up with some really daft names for accounts. 🙂

Long gone are the days when could imply a meaning from the name, so of course companies will over hype their wares with all manner of fancy names, as the ASA has no teeth to pull them up over it. We actually need decent regulators rather than the collection on wimpy ones we have at present.

Stephen Rosling says:
18 December 2012

It would be interesting to see the names of accounts offering less interest – if there are any! These names are completely mis-leading. If and when savings rates do improve, they’ve got nowhere to go with their names!

I’m intrigued that Which! manages to have the Post Office Instant Saver at position 2 in the Best Rate savings accounts list paying 2.10% of which 2.00% is a 12 month bonus.

I suppose the idea is to move the cash after 12 months.

First Direct do offer a regular savings account that pays 8% on a limited £300 a month for a year – renewable every year.- So it always pays to shop around. My problem is at my age I need a savings account that is NOT penalised by instant withdrawals.

Banjo – most savings accounts seem to be one year terms – a low rate plus a 12 month bonus. You need to review them at 12 months and move to another account that pays the best rate. Its silly – just a way of banks trading on customers inertia to make a profit, but no different to insurance premiums, AA subscription, energy tariffs. It is those clever marketing crooks extracting more money from naive punters.

These accounts have been around for decades, all with fancy titles and all paying a pittance. Presumably some people invest in them or they wouldn’t exist. I wonder who these people are? ISA’s are the new rip off product especially when the best of the taxable accounts pay more than some offered as tax free. Never mind the crash, it’s business as usual out there!!

Rosie says:
21 December 2012

When the bonus rates end and you ask for your money back, few savings institutions will pay it direct into your nominated account. They send a cheque which typically takes at least 5 days to reach you after the account is closed; then you have to get it to the bank and wait for it to clear before you can re-invest it and it seems to take as much as two weeks for the new account to be set up.
My Post Office Online Saver bonus ends next month. They will not transfer the funds to their latest online account offering. I have to write and close the old account which “takes 5 days to close”; the money is transferred to my nominated account (I hope) and only then I can apply online for the new account which “takes 10 days to set up”.!!! My money is therefore out of action for up to 3 weeks!
I am getting so exasperated with the way these institutions treat me and my money, never mind the derisory interest rates. I walk away but the list of possible places I want to put my money gets shorter and shorter.