Saturday 13 November C autious building society savers are putting thousands of pounds each into investment products whose advertised maximum returns are virtually impossible to achieve, an investigation by consumer watchdog Which?

Investopedia - Sharper Insight. Smarter Investing.

They are fixed-term accounts, typically running for between three and six years, that are usually linked to the performance of one or more stock market indices and available as cash Isas. However, your money is not directly invested in the stock market so it is not exposed to the same risks.

Some such as HSBC's will give you just your capital back if the stock market falls; others such as Leeds Building Society's latest Capital Growth Account offer a minimum return. The Financial Services Authority indicated a year ago that this was a sector it was keeping a close eye on, and earlier this year Which?

In next month's issues of Which?

Savers let down by promises of sky-high investment returns | Money | The Guardian

Money, the organisation will claim many of these accounts "arguably just aren't fit for purpose" and "have historically delivered very poor value".

The account manager in each case is investment bank Credit Suisse. Money editor James Daley says: She adds that the organisation will be writing to customers holding the accounts "to make sure they are happy with them, and understand the terms and conditions of the product".

A Leeds spokesman says: The Yorkshire says it believes the account "is marketed in a clear, fair and not misleading manner, [and] has a robust sales process attached to it …". It adds that during the sales meeting, "the customer is made fully aware of the circumstances that would have to exist if the maximum return was to be realised.

This is done verbally and using worked examples. Like the First Direct account above, the interest rate is less attractive than it first appears once you take into account how it is calculated.

If you withdraw any money you're charged 60 days' loss of interest. The rate is fixed until October 15, Make a second during the year and interest on all of the savings in the account drops to 0. The account is only available online. Please choose your username under which you would like all your comments to show up. You can only set your username once. International edition switch to the UK edition switch to the US edition switch to the Australia edition.

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