Don’t let your bank (or building society) trick you into putting money into this awful savings producct

With bank and building society (BS) rates at record lows and likely to stay there for many years, one group of people is striking it rich. These are the�bank and BS �’financial advisers’ or ‘relationship managers’ or whatever they call themselves. In fact they are just greedy and dishonest salespeople ordered to sell a few lucrative (for the banks and BS) products to gullible customers. One group of products they are pushing hard are usually called ‘Growth Bonds’ or ‘Guaranteed Bonds’ or something like that. These promise 110% or 120% of stockmarket growth over a period of 3 or 5 years, but also guarantee to return all a saver’s money if stock markets fall. Sounds great doesn’t it?

The problem is that most people tricked into these bonds don’t know that 90% of the gains made from buying shares comes from�the dividends paid by the companies whose shares you have bought, NOT from any rise in the overall market. Yet with these bonds, you don’t get the dividends – the banks and BS keep those for themselves. And over the last 100 or so years most stock markets have only gone up about 1% a year as dud companies go bust and new ones enter the market. So with these bonds, you’ll be lucky to get more than just over 1% a year. Not much! The banks (hello HSBC) and BS (hello Yorkshire BS) know this – that’s why they’re so eagerly flogging these dreadful products to customers who don’t know they’re being lied to and cheated.