Leeds advises on low interest

Click to follow
LEEDS Permanent Building Society this week launched a telephone hotline aimed at thousands of people with the top 40 banks and building societies who have accounts that pay very low interest.

Callers will be told whether their accounts are 'obsolete'. Because these accounts are no longer actively marketed, they tend to have very low rates of interest.

Many people are unaware that they can get much higher interest elsewhere. About pounds 800m is believed to be invested in obsolete accounts.

The hotline, which runs until 17 September, follows a pilot scheme in which 40 per cent of 600 callers found their accounts were obsolete.

Paul Duffin, head of savings at Leeds, said: 'If you've had the same account for more than three years there is a good chance that you could be losing money.'

Societies say they are doing all they can to persuade their account holders to switch where it would be to their advantage to do so.

Halifax Building Society has had an Instant Extra account since April 1991, paying 2.25 per cent gross interest on deposits of pounds 500.

It was replaced by the Instant Extra Plus account, which pays 3.75 per cent gross. Yet thousands of Halifax customers still leave their money in the worse account.

A society spokeswoman said: 'The society sends out letters, our circulars and statements all urge people to inquire whether a change makes sense, and our cashiers are trained to ask people who bring in pass-books whether they want to switch.

'That said, we do not consider these accounts to be obsolete. People still receive statements about their accounts in the same way as all our customers.'

National Westminster Bank, and the Alliance & Leicester and Yorkshire building societies are among those with obsolete accounts.

A Leeds spokesman denied the society's action was an attack on other banks and building societies. 'They will be advised they should go back to their branches and find out whether they should be placed in a better account. But obviously, we will also be pointing out that we do not have obsolete accounts.'

Looking for credit card or current account deals? Search here