Provider Focus: Scottish Widows Bank - a savings specialist

Provider Focus: Scottish Widows Bank - a savings specialist

26 June 2012 / by Oliver Roylance-Smith

Scottish Widows Bank offers customers a wide range of savings accounts, catering for personal customers as well as charities, trusts, clubs, associations and pensions. We take a closer look at what makes them such a popular choice and provide a round up of their latest offerings.

A brand steeped in history

The value and service that Scottish Widows Bank aims to deliver traces its roots back as early as 1812 but the real turning point was the then radical decision in 1986 to create the living logo: the Scottish Widow.

The impact was to make Scottish Widows a household name by the development of an icon that confronted all the negative values associated with the word ‘widow’ and presented the positive values - strength, reliability, integrity, innovation and heritage.

Building on this and yet by historical comparisons relatively new, the bank was launched in 1995 and now offers a mixture of savings and mortgage products.

Structure

Scottish Widows Bank plc is part of Lloyds Banking Group plc and importantly has its own individual banking licence.

This independence in combination with being part of a larger financial group allows the bank to blend financial stability with a genuine focus on offering saving and mortgage products which could offer solutions for a wide range of customers.

Current product range

In addition to the structure, strength and security, many of our customers use Scottish Widows Bank for the quality of their savings products, from easy access to longer term fixed rates, available to both personal and non-personal customers.

Short term

For our personal customers the most popular product is the Direct Transfer Account. This account is currently paying 2.80% gross/AER variable (including a bonus of 0.89% for 12 months) and is available with a minimum balance of £1,000. Deposits can be made by internet banking, telephone or post and there is no notice period or penalties for early withdrawals

The bonus element for the first 12 months is 0.89% which means the account will revert to 1.91% gross/AER variable after the first year. Even with the best intentions many savers fail to switch in good time or at all and for this reason the balance between attractive introductory rate plus highly competitive post introductory rate make this a popular option.

For non-personal customers the 7 Day Notice Deposit Account, available to charities, trusts, clubs, associations and pension trustees. For balances over £50,000, this account pays 1.85% gross/AER variable and 1.60% gross/AER variable for balances below this amount. The account can be opened with a minimum deposit of £500 and interest can be paid to the account held with them or a nominated account of your choice with interest paid monthly, quarterly or annually.

Medium and longer term

The 3 Year Fixed Term Deposit for personal customers is currently offering 3.50% AER and the 5 Year Fixed Term Deposit is currently paying 4.00% gross/AER (based on interest paid annually). Both accounts require a minimum deposit of £10,000 and interest can be paid monthly, quarterly or annually, with the option to receive net or gross depending on your tax status. Access is normally only at the end of the agreed term.

These rates have been particularly popular with non-personal customers looking for a safe environment and a competitive rate of return.

Deciding on where to put your money is not just dependent on the headline rate, and the global events in recent years are a constant reminder of how important it is to consider the broader picture before making a commitment with our savings.

No news, feature article or comment should be seen as a personal recommendation.

Rate information correct as at 26/06/2012

© Fair Investment Company Limited

AER — Stands for the Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year. (As every advertisement for a savings product which quotes an interest rate will contain an AER, you will be able to compare more easily what return you can expect from your savings over time).

Gross — This is the contractual rate of interest payable before the deduction of income tax at the rate specified by law (currently 20%).