Archive | April, 2012

Are Your Savings Safe In A Bank?

25 Apr

Today I have been looking at the different savings accounts on the market.  It didn’t take long.  I didn’t manage to find any accounts paying above the current rate of inflation – so the longer my money is “saved”, the more money I will lose…

However, what I did notice is the amount of accounts where if I withdraw my money early, or I try and make several withdrawals within a year there are “penalties” to be paid.  What concerned me about some of the penalties was the fact the bank could charge me more interest than what I had received in the first place – thus (in their words) “reducing my capital balance”. So in other words, if I “saved” my money with the bank, but I wanted it all back, or I wanted it back in smaller amounts, then I could end up in the situation where I would have less money than what I had saved in the first place.

I was alarmed – how could me saving money end up costing money?

So I started reading the T&Cs.  I’ll confess – I usually just read the headlines and the interest rate the bank is paying – not the small print.

But, this penalty stuff and the fact I may end up with less money than what I had deposited in the first place worried me and so I started to read the small print.

The small print was scary.

The small print really made me wonder about the safety of your savings if you have borrowings with that bank.

The small print of the Aldermore savings account says:

13. Set-off

13.1 We may use any funds deposited with us to repay or reduce any debt which you may have with us (subject to any borrowing terms you agree with us) either in your own name or jointly with anyone else as borrower, guarantor or in any other way. We may do this without giving you prior notice, but you will be notified immediately after we have done this.

 

Now if you’ve borrowed money from the bank, it is usually best practice to pay it back – it was their money to start with.  But, in this current climate where banks can do what the hell they want, without any regard to anything, it just got me thinking…

This clause states – Aldermore can use any funds you have deposited with them to repay or reduce any debt you may have with them…either in your own name, or that you may have with anyone else…or in any other way.

To be honest, the clause may as well read: Aldermore can use any funds you are stupid enough to “save” with us for anything we feel like.

Because, quite frankly, that’s what the clause means. It means you give Aldermore your savings and they will pay you a paltry interest rate – but when they feel like it, they will rape your savings account for anything and anyone and don’t think they have to tell you before they do it. No. But Aldermore will notify you after they have taken your money. Immediately after they have taken your money.

Now maybe it’s just me, maybe it’s unfair to think that banks can do what the F**K they like, but given I have been shafted by Skipton, and Bank of Ireland, it’s little wonder I don’t trust the banks.

And this has really got me thinking: just how safe are my savings in the hands of the banks?