Don’t fall for the banks’ latest �58bn con and the lies they use to sell it

Britain’s pathetically low interest rates have been a bonanza for banks like Barclays and HSBC. Firstly, they can take billions of our money, intended to be lent to businesses, and use it instead to speculate on commodities like oil and food, pushing up the prices and�stoking inflation causing hardship in Britain and�misery in the Third World in what one banker called “financial mass murder”.

In Britain, the banks have used their low interest rates to�goad savers into taking their money out of safe, 2- to 3-year�deposit accounts and put it into riskier investment schemes. One of the most blatant rip-offs being flogged by banks is what they call ‘structured products’. These usually have reassuring names like ‘Growth Bond’ or ‘Guaranteed Bond’ or ‘Capital Protected Fund’. Sadly, savers have put around �58bn into these schemes, earning the banks’ salespeople�almost �2 billion of our money in commissions.

These products usually promise something like 120% of any stockmarket growth over 4 or 5 years plus guarantee the return of your capital if there is no growth. To sell these products, bank staff will usually trot out the line – “over the longer term, shares always outperform cash”. But this is a lie. The measure banks use for cash are government bonds, yet most 2- to 3-year savings accounts pay much more than government bonds. So the comparison of shares and cash is rigged to make shares look like a better bet.

Moreover, these products are scams because stock markets really�don’t grow. Instead they move between two levels – for the FTSE100 the range is between 4900 and 6200. The real benefits of owning shares comes from the dividends paid each year by the companies whose shares you own. But these products don’t buy shares, so you don’t get the benefits of any dividends.

There is only one certainty with these products – most savers will lose money and all those selling these products will make a fortune from savers’ gullibility.

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