A new instant access savings account from a Lloyds Banking Group member is offering 3.2 per cent with the catch that you need a massive minimum deposit of £50,000.
BM Savings, which, much like Lloyds TSB, is a member of the massive banking group, unveiled the new savings product recently, though industry experts say it does little to encourage savings activity in Brits with the largest need. Instead the new account, which requires £50,000 at a minimum to be kept within it at all times or risk losing out on that 3.2 per cent interest rate, could only appeal to those looking for places to stash inheritance money or for house-sellers undecided on a home for leftover cash.
As if the massive minimum deposit requirement wasn’t enough, there are other caveats that go along with the new savings product. 2.1 percentage points’ worth of its interest rate come in the form of a fixed bonus, which expires after the course of a year, and savers who drop below £50,000 see their rate fall to 3 per cent, while those with sub-£20,000 balances sink to a 2.6 per cent rate of return.
BM Savings executives will doubtlessly tout their new savings product as running against the grain of many other providers, as easy access savings rates have been slashed nearly across the board. Both Sainsbury’s and ING Direct have cut their rates, with a drop of 0.25 and 0.1 percentage points respectively.
However, the high minimum deposit requirement precludes most Brits from reaping the benefits of BM Savings’ high rates, as few households in the UK have a spare £50,000 lying about. Those that do have that kind of cash available are most likely not in dire need to save for the future as the rest of the country, especially in light of concerns over slow economic recovery from the economic downturn and soaring inflation.