Sainsbury's offer to take your money, but not give it back

9 June 2009

Here's a quick test for you. What is wrong with the following press release?

Sainsbury's Internet Saver gives savers a new special offer rate of 2.6% AER (variable) on deposits up to £500,000

Sainsbury's Finance today announces a new Internet Saver special offer that will pay a rate of 2.6% Gross AER (variable) to customers opening an account with deposits up to £500,000

Sainsbury's Finance Internet Saver will pay a higher rate (1.85% above the account's standard rate), on all Internet Saver balances opened between 9th and 30th June 2009, providing the saver does not make more than three withdrawals a year.  If the number of withdrawals exceeds three during a 12-month period, the interest rate reverts to the account's standard rate of interest, currently 0.75% Gross AER.

Sainsbury's Internet Saver account has achieved 'Moneyfacts - Trust It' status for offering a consistently good rate over 36 months(1).  Analysis by Defaqto(2) reveals that Sainsbury's Internet Saver is the only instant or easy access savings account generally available that has consistently paid a gross AER interest rate on a balance of £1 that is equal to or above the Bank of England base rate in each and every month since January 2005.

Helen Cook, Head of Savings at Sainsbury's Finance said: "We are delighted to be able to offer our customers yet another competitive offer with our Internet Saver account."

Sainsbury's Finance has its own banking licence, is separately regulated by the Financial Services Authority and has an independent membership to the Financial Services Compensation Scheme.

Give up? OK, let's have a little recap of recent history. Does the name Icesave ring any bells? If a bank goes belly up, how much of its savers' deposits are covered under the government's post-credit crunch boosted compensation scheme?

What's that? £50,000 sir? You're quite correct. The whole press release is above. Can you see any reference to the compensation scheme limits on an account that takes deposits of up to half a million pounds, or ten times the financial services compensation scheme limit? No, nor can I. Well there must be something on the bank's website mustn't there? I mean, they wouldn't be that irresponsible in the current climate would they? Shall we take a look? [looks] Nope, nothing there either. Oh hang on, if I take a look at the FAQs it's there, hurrah!

How secure is your money?

Sainsbury's Bank plc manages its liquidity and capital base with strong financial processes and controls.  We operate under our own independant banking licence and are authorised and regulated by the Financial Services Authority.  FSA register number 184514. As such, our depositors benefit independently from the protection offered by the Financial Services Compensation Scheme (FSCS).  The FSCS pays compensation up to the limit of £50,000 per person, per institution.   More information on the FSCS is available on its website

Can't find it anywhere else though.

Apart from the fundamentally idiotic belief that anyone with half a million pounds to invest would stick it in Sainsbury's bank, or even in one place, isn't it a wee bit of an oversight to include sales message after sales message but neglect to point out equally prominently that should the worst happen and Sainsbury's Bank, which is backed by Lloyds, go belly up, you'll get back £50k. Pennies. Small change. Sainsbury's arguably has no statutory responsibility to point this out several more times than it has, but at the risk of being old fashioned, doesn't it have a moral one?

TOPICS:   Banking


  • Francis R.
    Yes, I'm not stupid, I'm going to invest my millions in Elephant sadle making companies.
  • LB33
    What a complete and utter non-story... good to see you're still desperately clutching at straws.
  • gravy
    That'll be "independent" then. Can't even spell.
  • Tizer
    LB33 - your a scab
  • Nobby
    Why is this different to any other bank? Most do this don't they?
  • zac
    more drivel form the worst blog on the internet
  • Mike U.
    zac I see your still posting, just F Off!! if you don't like it
  • Tizer
    @ Zac - more drivel form the biggest tool on the internet... A'Thank You
  • Uncle T.
    I'll pay 15% Gross AER (variable) on £50k and 20% Gross AER (variable) on £500k, if anyone is interested in investing in my investment Co.
  • Quagmire
    Really is a non story and a waste of space tbh!! Banks are not there to wipe your arse - people have to have brains and can't expect every little detail explained!
  • Jamie
    Are you serious? How is this news? Did you know that in Gillette adverts they don't mention the fact that if you're not careful you could cut your face? Also, the Ford adverts forget to mention that you could be in a car accident and die! If someone invests over the £50,000 mark in a company and it goes belly-up and they haven't taken the correct precautions, that is their own doing. It is the financial version of darwin. I've just visited the websites of 2 major banks and a building society and guess what... None of them mention the £50,000 limit either! Nationwide, a company I am fairly familiar with, has accounts which go up to £3,000,000 and no mention of the £50,000 limit! And they're one of those namby-pamby mutual organisations! Hate to jump on any bandwagon but seriously, this is not article worthy.
  • Tizer
    Jamie you arse candle
  • Francis R.
    Yeah Jamie! (What's an arse candle?)
  • Jill
    Echoing what has been said above, no banks advertise the compensation limit - you could replace Sainsburys with any other brand and it would be equally correct - so why pick on them. The headline is also wildly inaccurate - nowhere does it mention anything about not letting you get it back. Shame, your article on foreign currency cards yesterday was pretty good and now you go and do this...
  • xargle
    Um, people seem to be getting rather wound up about this. Took seconds to read, and I found it mildly amusing that they're bothering trying to get people to stick this much in a bank account. Yes the "moral obligation" is a bit of a ridiculous premise to expect of a bank but then you get all sorts of horseshit in the media - most of which you actually pay for. Calm down. Spanners!
  • Jill
    I'm not angry or annoyed, just disappointed that after writing a good article yesterday, this new person has joined in with the rest of them and is now making pointless, ill-informed drivel (yes there are some good articles on here, but a lot are pretty poor).
  • juankerr
    I'm pretty sure all banks will try and get you to invest over 50k, so why pick on Sainsburys? Stale sandwich? Sour grapes? Also "Remember Icesave" is downright misleading. Icesave was an Icelandic bank with no guarantee of getting £50,000 back, although unlucky private savers actually got all their cash back in the end. Sainsburys is run by Lloyds who are 42% owned by the Government last time I checked so while I wouldn't necessarily recommend sticking more than 50k in there, I wouldn't lose sleep at night if I had more in there..
  • Bob
    Lets see... "Can you see any reference to the compensation scheme limits on an account that takes deposits of up to half a million pounds, or ten times the financial services compensation scheme limit?" Yes. The press release says that "Sainsbury’s Finance ...has an independent membership to the Financial Services Compensation Scheme." i.e. you get the full £50,000 protection, seperate to any deposits with other Lloyds back institutions. However, if I wasn't quite sure what that meant, where might I look for the answer... You helpfully answer your own question: "Well there must be something on the bank’s website mustn’t there? ... Oh hang on, if I take a look at the FAQs it’s there, hurrah!" So, they do mention it then, and where else would you expect to find such an answer to an important question than in the Frequently Asked Questions section. As another poster mentioned, this is typical of many banks, so if you feel it worth bringing this to people's attention, there's no need to victimise Sainsburys in the process.
  • Nobby
    @xargle > Took seconds to read, and I found it mildly amusing that they’re bothering trying to get people to stick this much in a bank account. They are not trying to get people to stick that much money in a bank account. They are saying this is the interest rate up to that amount and that you cannot hold more than this amount in the account. They don't seem to have an account you can hold a larger amount in. They are only trying to get you to put that much in the account if the lowest amount you can hold is £500000. In this case the lowest amount is just £1. It is not that unusual to have a large sum in the bank. At one stage I had about £400K in one bank account a few years back, after a house sale and before the next purchase.

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