Which? has uncovered the savings accounts that sound like they pay you a fortune in interest but actually only give you a pittance, with some accounts paying a miserly 0.05% a year.
In the current low-interest environment, you might find it hard to swallow that banks and building societies are still giving their savings accounts names such as Extra High Interest, Midas Gold, Extra Special and Triple Gold. And yet, there are accounts with these names that pay miserly interest rates.
Take NatWest’s Diamond Reserve paying 0.1% – for every £100 you save, you’ll get just 10p in annual interest. We’ve listed the worst offenders in the table below.
|Savings hall of shame|
|The table below shows what we consider to be the instant-access and notice savings accounts with the biggest mismatch between a low interest rate and a high-value name.|
|Account||Provider||Interest rate on £1,000|
|Extra Special||Dudley BS||0.05%|
|Instant Sapphire||Cambridge BS||0.05%|
|Cash Stash||First Trust Bank (NI)||0.05%|
|Gold Access||Leeds BS||0.05%|
|Gold Account||Dunfermline BS||0.1%|
|Platinum Saver||Lloyds TSB||0.1%|
|Midas Gold||Danske Bank||0.1%|
|High Rise||Norwich & Peterborough BS||0.1%|
|Extra High Interest||Newcastle BS||0.1%|
|Triple Gold||Derbyshire BS||0.1%|
- Accurate to 21/12/12
Some grandiosely titled accounts are less stingy if you’re able to save more. The Extra High Interest account from Julian Hodge Bank, for example, pays a pathetic 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, boosts its rate from 0.1% to just 0.13% for balances of £5,000-£25,000, while Derbyshire BS’s Triple Gold account increases its rate from 0.1% to just 0.11% if you save at least £10,000 and 0.12% on balances of £50,000.
Visit our guide to finding the best savings account to get a better deal on your money.
Many of the savings accounts now paying insulting returns once paid higher rates. 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 but they were far better than the current advertised rates of 0.1% and 0.05% respectively.
Typical of the hundreds of ‘superseded’ accounts that are no longer available to new customers, the rate paid on these accounts has fallen over time. So while banks and building societies advertise attractive rates on other accounts to new customers, existing customers lose out with rates as low as 0.01%.