I am not a financial genius. Perhaps someone else could point out the selling point here for me?
Whilst standing in the queue around the corner from work to get some cash out this morning (because my normal ATM is on the fritz) I spotted this promotional board out the front of the bank branch. Now, ignoring for a second the fact that the account’s designed for the over 50’s…
Clearly the 6% is meant to be the eye-drawing thing, otherwise they wouldn’t have made it so big, bold, contrasty, or put it in the middle of the poster. 6% seems an attractive number for an interest rate to be at the minute – many savings accounts offer lower rates than this, and this is a current account (meaning you can Do Stuff with it).
Now, is there more to this, or have I got it right in that the fine print specifies “on balances up to £2,500”, meaning the maximum interest you could actually reap from this would be £150?
Given that a £10 monthly fee applies, this means you’re going to benefit to the tune of £30 for the year. Sort of closer to a return of 1.2%. Well, minus any tax you pay on the interest, of course.
Maybe there’s nothing particularly remarkable about this when compared with other current accounts – I think mine’s a tenner a month in fees, and I’m pretty sure the rate isn’t 6%… I guess the limiting of the 6% to the first £2,500 only effectively takes “SELLING POINT!” and adds a footnote of (* not a real selling point).
Ah, who cares?