60 times more interest

[johnlambert]

I don't usually venture into Business + finance but there is something I can't understand about the spate of adverts for Halifax, Alliance + Leicester and other banks thsat claim to give you 60 times more interest than any other bank. How does that work? The way I figure it is thus: if say the Midsahire bank offered and interest rate of 1% then, 60 x 1 = 60% interest, or �60 free for every �100 saved per year. I know this is not the case, but, how can they advertise this and justify it?
Thanks in advance

[BigMac]

You are correct in your working out. But the adverts usually refer to CURRENT accounts; many current accounts do not give interest on credit balances but some do. However, lots of the interest paying current accounts only offer, say, 0.1%. Therefore, a bank offering 30x or 60x more than another bank would only have to pay interest of 3% or 6% respectively.

Hope this helps.

[johnlambert]

Excellent answer BigMac, thank you

[WoWo]

Nothing to add to BigMac, but I will anyway.

As mentioned the major banks don't tend to give interest at any significant level on current accounts, the adverts are specific in their claims saying they offer 60 x more than Barclays, Lloyds standard current accounts, this is true, as you say they can't claim something if it was not.

This is not to say these banks do not offer other rates just that their standard rates are that low, as in fact I'm sure Halifax also offer accounts which such low rates. It should also be mentioned that these high rate current accounts are generally a load of rubbish anyway because the rules to actually get you the 3/6% rates are fairly tight, a certain limit on how much you must put in each month and how high a balance you must maintain, for many people they would never get such high rates of interest.

[stuart100]

I don't think the rules are that strict.

I have a Halifax High Interest Current Account, all I have to do is pay �1,000 in a month (which my salary covers) and then I get 6% up to �2,500. I never have more than that in my account so I'm always getting the high rate, if I ever go over �2,500 I just transfer the rest into my websaver which transfers instantly