Misleading savings accounts can waste your money completely
There are numerous occasions where you will be fooled by misleading savings accounts. These are fraudsand often assure people of giving better returns. In the actual scenario if you invest in something like this, you end up losing a lot of money.Every timesomeone knocks your door and tells you about these kinds of investment platforms, be sure and have enough knowledge before signing on the dotted line.
In most cases it is seen that the bankersare playing tricks with the interest rates which are to be paid by them upon investing an amount.These banks show different rates which may seem mouthwatering but actually yield less return. The most important fact is that none of these misleading savings bank accountsfollow the government guidelines regarding interest rates. Let’s take an example. Marks & Spencer, one of the leading financial institutions in the world was offering almost 6% interest rates to the savings bank holders on deposit of 250 pounds a month in the UK. This interest rate was higher than the best performing investment plan in the market. When you see such an advertisementquite obviously it will attract you. However there arecertain terms and conditionsbehind all this and similar plans in other banks.
The real story
If you look at it carefully, then the calculation is a bit different. The entire investment plan is for a full year. Upon savings, you will get the maximum rate in the last year, i.e.,month number 12.When you will start, the rate will be much lower, say 2 or 3%. This will keep on increasing at a slow pace to 6% which is in the year end. Thus you will get a return which is reallyless compared to an investment in another tool. A similar plan would have fetched you 100 pounds (let’s say) but here you will only gain 75 pounds.
Let’s take another example;Royal Bank of Scotland attracts customers by misleading them through various ad campaigns. You will find account holders receiving 30-40 poundsas interest every month, which is quite high. On scrutiny you will see that these rates are only applicable for the banks current account holders. Also if the deposit amount goes below 25000 pounds, the rate is a meager 0.4 %.
This practice is not just prevalent in the UK. You will find it everywhere in the globe. Whether it is the USA or India or the European Union, these malpractices prevail everywhere.Thus it is advisable to go online and get the best rates. There are numerous websites where you will find lots of details regarding the matter.Take the help of experts who will provide better information regarding the matter.
Here are some guidelines if you are new to these investments. First check the goodwill and performance of the bank in the market. If it is reputedbut still offers something which is surprising, beware. Second, ask others who have put moneyin these types of savings accounts. You will get the clear picture. Third, no matter how ludicrous a savings account is, stick to your own investment plan. So the next time you invest, be careful.