Clicking on the link for the Special Term Account 3 year brings up info on the gross and AER rates for the first 52 weeks/1 year, there's also the reasonably clear statementAt particular times in your life you may find that you have a sum of money you can put away. It could be a lump sum received through inheritance, retirement or even from savings built up over the years. One option for such a lump sum deposit is a Fixed Term Deposit Account. It offers security for your money for the term chosen, with a fixed rate of interest.
- Advantage Fixed Term Deposit Account
- 3 Year Growth Account
- Special Term Account 3 Year
The sneakiest part of all IMO is where it saysInterest rates for years 2 and 3 will be confirmed on the anniversary of the account
There is no doubt in my mind that this has the potential to mislead. Well done to CiaranT for spotting this.The account term is three years
The rate is fixed each year
Why is the first EUR480 Dirt free?
Agree with all the posts above.
Thanks all.
The press advertisements are one of the worst aspects of this with no mention of the fact that the rate is at the banks discretion for 2 years of the 3 year term.
BoI clearly designed this product to lure customers in with an attractive rate for year one and then pay them next to nothing (possibly 0.01%) for year 2 and year 3 but to leave them with no way out. Trickery, entrapment and misleading.
Why would anyone opt for this account where you are stuck in it for three or five years and the bank can set the interest rate after year 1?
(Look what happened to the unfortunate Bank of Ireland tracker mortgage holders in the UK, who didn't bother reading the terms and conditions. They are now on SVR mortgages. )
What if AIB or BoI drops the rate to 0.1% after year 1? Can the customer get out of the product?
It is essential that banks who offer this product highlight the fact that the interest rate is at their discretion in Years 2 and 3.
The odd thing about the ad in the Sunday Times is that it does not mention a rate.
I got the following statement from a spokesman for Bank of Ireland
Unfortunately, Bank of Ireland is bound by strict legislation on this product that does not permit us to fix or indicate the rates on this product for year 2 and 3. The specific legislation restricting this is contained in the Finance Act 2001, Section 7 (e) which states "(e) there shall not be any agreement, arrangement or understanding in existence, whether express or implied, which influences or determines, or could influence or determine, the rate (other than an unspecified and variable rate) of interest which is paid or payable, in respect of the relevant deposit or relevant deposits held in the account, in or in respect of any period which is more than 12 months" (page 150 on pdf). Thus, while we are clearly meeting our obligations under CPC, we are bound and restricted by specific legislative conditions of this product.
I have looked at this at great lengths for banks thinking of introducing the product, but most abandoned it when you read the mind boggling rules Revenue thought up of .
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