Sainsbury's offer to take your money, but not give it back
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 www.fscs.org.uk/.
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?