Beware of 'golden' accounts that pay peanuts

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The Independent Online

The internet price comparison website www.moneysupermarket.com today lambasts banks and building societies for misleading savers with accounts that sound lucrative but pay next to nothing in interest.

The research highlights the Lloyds TSB Instant Gold account and Scarborough SuperSaver account, which pay just 0.9 per cent and 0.75 per cent AER respectively - far less than their names might suggest. These rates are highly uncompetitive compared with the best in the market, such as Birmingham Midshires' Internet Easy Access Savings Account at 5.4 per cent AER and the AA Telephone Savings Account at 5.36 per cent AER.

"If you are looking for a savings account with a 'supersave' return or a 'premier' interest rate, then you are probably better off avoiding accounts that bear those names," said Stuart Glendinning, director of savings accounts at www.moneysupermaket.com. "In an environment where interest rates are rising, it is disappointing to see that so many banks and building societies are still offering accounts with such poor rates of interest - in some cases less than the rate of inflation."

In some cases, banks or building societies have taken over weaker rivals, inherited accounts with tempting titles, then run them down without informing account holders.

The most notorious case is Halifax Liquid Gold. When it was part of the Leeds Permanent Building Society product range, it was a top payer and was promoted in TV ads featuring George Cole in his Minder role. But now it pays only 0.65 per cent for savings between £50 and £499, and 0.7 per cent for higher amounts.

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