Slightly dubious finance

[fivemack]

It seems that Birmingham Midshires, part of Halifax, part of the HBOS group, is a bunch of bankers.

They seem annually to invent a new sort of savings account, with a name very similar to their previous sort of savings account and a reasonable headline rate; the financially credulous such as myself assume that the account they had already now pays the new rate.

In fact, it turns out that I have a 'Birmingham Midshires Internet Easy Access Issue 6', which pays 5.8%. What they offer on the front page is a 'Direct Internet Savings Account', which pays 6%. There is a limited amount that it's worth worrying about twenty basis points (and I might as well worry about forty-five and move to Sainsbury's Bank), but I feel I should bank with people who don't try to pull that kind of fast one.

Of course, possibly banks which act always in the best interests of their depositors tend not always to give their depositors the best available interest; also, whilst I don't think the present turmoil is the kind of thing that will break savings rather than investment banks, perhaps moving my life savings around during a liquidity crisis is not pure wisdom.

Comments

[miramon.livejournal.com]

Well, don't switch to Abbey then. They create a new sort of account and change the old accounts to paying 0.1% (that's a tenth of a percent) without telling you. Birmingham Midshires seem very honest in comparison.

[aardvark179.livejournal.com]

Yes, but think of the tee-shirt! "I triggered this market collapse and all I got was a lousy tee-shirt, which I lost."

[vicarage.livejournal.com]

I've been caught by Birmingham Midshires in the past. ING Direct are also known for starting with excellent rates and then lagging well behind the field.

I'd go for Nationwide E-savings, who are consistent. They, and M&G, are the 2 financial institutions I've found to be excellent.

[karen2205]

Building societies tend to be better bets than banks for this reason for savings.

[dd-b.livejournal.com]

Perhaps spreading your life savings out, among several institutions, during a liquidity crisis might be smarter. Or holding (some of) them in some form other than straight savings. Although it depends on amounts and rules; is there any sort of insurance that covers these accounts, and does it cover the amount you have? That could remove most of the risk. (In the US, FDIC covers up to $100,000 in most real bank accounts, unless the limit has changed while I wasn't watching, but of course you're not *in* the US so I don't know your local situation.)

[vicarage.livejournal.com]

If FSA approved, they guarantee the first £2000 and 90% of the next £33000, per organisation.