Topic 4

Question 1

Teaser rates

Answer 1

• interest rates have been very low since 09 and savers get a very low return on deposits
• some banks offer a higher rate of interest on savings accounts for new customers for a limited period and when this period ends, the rate reverts back to its original low rate
• many banks operate the same scheme but customers are unaware that the initial rate is temporary
• media reporting refers to the introductory bonuses as ‘teaser rates’
• reports say bonuses are reasonable but should contact their customers near the end of that period to give them the chance to switch
• in 2014 RBS, NatWest stopped offering teaser rates to regain customer trust