Thursday, 19 March 2009

Small Print

As someone rapidly approaching the Big 50 my attention was caught by an advert in the paper today "Exclusively for the Over 50s. Premier 50 Current Account giving 5.0% AER interest" The 5.0% being in letters almost 2 inches high. Not a bad deal I thought. However then came the small print. On balances up to £2,500. 0.1% on balances over £2,500. This being in letters less than a quarter of an inch high.

So, if you hadn't read the small print and invested £10,000 you would be expecting 5%, or £500 a year income. what you'd actually get is £132.50. Unfortunately there was more small print. A £10 monthly fee applies. So Investing £10,000 would actually yield £12.50 a year. If you invested the maximum (£2,500) at the top rate the yield would be £5.00 after fees and charges. If they had said in the advert that "Exclusively for the Over 50s. The Premier 50 Current Account at 0.2%" then it isn't quite as attractive. Or invest £10,000 at 0.125% (which is what you would actually get) then the deal isn't quite so good!

In case you are wodering which bank was offering this deal......
I hope you can make that out? It is very small. You always did have to read the small print but it's even worse these days, and the Banks wonder why people have lost all trust in them.

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