Bank offers savers 0% interest
Updated on 12 January 2009
A bank is paying a starting interest rate of 0% on all of its variable rate savings accounts, it has emerged.
Julian Hodge Bank, in Wales, is offering savers with less than £1,000 to invest a zero return on their money for all of its variable rate accounts.
Customers need to invest at least £10,000 into the group's instant access savings account before they get a return on their money, and even then it pays only 0.5% before tax, rising to 1% if people have a balance of £50,000.
The group's High Interest Cheque Account only pays interest to people who hold a balance of £50,000, and with returns of just 0.4% after tax, the account hardly lives up to its name.
The returns paid by the bank could fall further still, as the current rates came into force on December 10, before the most recent interest base rate cut of 0.5%.
The figures come as data from the Bank of England showed that the interest paid on notice accounts, tax-free ISAs and bonds last month was the lowest since records began in 1995, while the average return on instant access accounts was just 0.81%.
But consumers can get a better deal on their money with Julian Hodge Bank by opting for one of its fixed rate savings products, with people who have at least £1,000 to invest able to get a rate of 4.25% in a deposit account if they lock up their money for nine months, or 4.5% through a one-year bond.
The group's one-year tax-free ISA also offers returns of 4% fixed for one year.
It was not possible to contact anyone at Julian Hodge Bank to comment.
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