I have a deposit at Solbank (Sabadell) due to mature soon, and asked about interest rates if I roll it over for another year. A couple of things they said made me raise an eyebrow, and I wondered if anyone else has heard similar.
Firstly, they claimed the govt. won't allow any bank to pay more than 3% on savings at the moment. I just took this to be a ploy to convince me there's no point shopping around. Is it possible that the govt. could dictate to banks what interest they can pay?
And secondly, and even more "eyebrow raising" was this: a deposit paying 3% would, of course be covered by the govt. backed savings compensation scheme, but they offered me an alternative deposit paying 4%, but backed only by the bank itself and not covered by the govt. scheme. The manager of my branch assured me that "it's impossible for Banco Sabadell to fail anyway, that the Spanish govt. would fail before Sabadell because Sabadell has more money than the govt." Could it even be legal for them to offer a deposit not covered by the normal scheme?
Bank Savings compensation
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Bank Savings compensation
Don't worry about what people think, they don't do it very often
"Acquiring a dog may be the only opportunity a human ever has to choose a relative," Mordecai Siegal 1935-2010.
"Acquiring a dog may be the only opportunity a human ever has to choose a relative," Mordecai Siegal 1935-2010.
Re: Bank Savings compensation
Be very very careful - just google Cam savings accounts for some ideas as to what can happen - in your shoes I would get the money out of a spanish bank and put it elsewhere.....
Re: Bank Savings compensation
I doubt that the government can dictate what interest rates to pay but remember the Icelandic banks with unpronounceable names offering too good to be true interest ratesFirstly, they claimed the govt. won't allow any bank to pay more than 3% on savings at the moment. I just took this to be a ploy to convince me there's no point shopping around. Is it possible that the govt. could dictate to banks what interest they can pay?
I suspect that the scheme paying 4% is not a deposit scheme but an investment one tied into the stock market or an insurance scheme, it is perfectly legal- Banco Sabadell and the govt. almost certainly have a similar amount of moneysecondly, and even more "eyebrow raising" was this: a deposit paying 3% would, of course be covered by the govt. backed savings compensation scheme, but they offered me an alternative deposit paying 4%, but backed only by the bank itself and not covered by the govt. scheme. The manager of my branch assured me that "it's impossible for Banco Sabadell to fail anyway, that the Spanish govt. would fail before Sabadell because Sabadell has more money than the govt." Could it even be legal for them to offer a deposit not covered by the normal scheme?
If you want safeish banks (way too big to fail, RBS/HBOS style) go for Santander or BBVA.
If it is more than 5 figures and your life savings consider moving a lot of it elsewhere.
Ann
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Re: Bank Savings compensation
I was told the same not so long ago. I visited all of the banks and the maximum I found was 3.3% ( I think that was for new money with Lloyds ) and I was given the same capping story - the govt would not allow more.
Caja Sur and Santander offered schemes outside of this at 4% and they were stocks linked I think, as Anna, suggested offering min 1 year deposits.
Caja Sur and Santander offered schemes outside of this at 4% and they were stocks linked I think, as Anna, suggested offering min 1 year deposits.
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Re: Bank Savings compensation
As Jool says be very very careful. Spanish friends put some redundacy money into a fixed 2 year bond with a savings bank 18 months ago. Went to see about getting some of it released and was told they cannot have ANY of their money for ten years. They have been to see two solicitors who confirm there is nothing they can do. Last week there was a demonstration in Osuna and there is talk of taking a group action.
As you can imagine they are not happy.
TT
As you can imagine they are not happy.
TT
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