Caution urged for those banking on web information for online savings accounts

14 November 2007
Increasing numbers of people are turning to the internet to obtain information, to make purchases and to manage online bank accounts. However, attractive offers and services on the web can sometimes be misleading and consumers should make sure they do not simply take information at face value.

According to British Midshires’ ‘Not so Average Joe’ campaign, 60 per cent of UK households are now online and 94 per cent of internet-enabled people seek advice on the web. Managing director of mortgages, Tim Hague, said: “It is great that people now have more information at their fingertips, but it is important to remember that not everyone is the same and advice on everything from relationships to mortgages needs to be tailored to meet people’s exact circumstances.”

Finance products feature highly on the list it has compiled of services used, with 46 per cent of respondents feeling confident that they can find all the financial advice they need online. A further 50 per cent carry out research online before seeking advice from another off-line source.

The survey shows that 43 per cent of participants seek savings advice online, while 23 per cent look for help with mortgages and 22 per cent search for advice on investments. A further 13 per cent use the internet for pensions advice. And overall, more people obtain financial information from an internet price comparison site, like (55 per cent) than from an independent financial advisor (46 per cent).

With savings proving a popular product for people to search for online, it is vital that information given about accounts is accurate and clear. However, some people claim to have been misled by online accounts offering seemingly attractive rates.

Some online savings accounts offer interest rates of five per cent or more, which is certainly competitive. But many applicants fail to realise the clauses that may be involved. For example, some will not pay any interest for the whole month if money has been withdrawn from the account in that month. Others are boosted by a before-tax bonus payable for 12 months.

“The internet has empowered consumers to do their own homework before they commit to a financial product,” says Mr Hague. But he adds that “financial decisions should never be taken lightly,” suggesting that consumers consult an intermediary before making any serious financial commitments.

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