6 Month Term Deposit Account Rabo Direct

R

Rooskey

Guest
Rabo Direct are advertising a 6 month Term Deposit Account with 5.25% return.From this I understood one would receive 5.25% less DIRT on a balance invested in this account for 6 months.

However when I contacted RABO, this 5.25% turned out to be an Annual rate, so in fact one will get half the stated return for the 6 months. I checked the information on the website and found no reference to this.Is this false advertising?
 
No - they clearly state 5.25% gross CAR on all of their marketing bumpf as required by law. [broken link removed]:
RaboDirect, part of the Rabobank Group and [broken link removed] online savings and investment bank, today announced a new market leading [broken link removed] of 5.25% CAR (Compound Annual Rate).
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Practically all interest rates are quoted annually.

Even if it's a 1 month, 3-month, 6-month account, the rates are always annual rates.
 
ClubMan said:
Which they must be by law.
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Yes, annual rates must be given but it is somewhat misleading unless you know was CAR means.

It think they should have to say the equivalent per the term they are offfering (6 months here) & how much interest this would equate to based on X amount being invested.
 
I noticed that some banks do this in the small print - i.e. specify the actual gross and net amount of interest earned for a specific term. I agree that it does help.
 
ClubMan said:
I noticed that some banks do this in the small print - i.e. specify the actual gross and net amount of interest earned for a specific term. I agree that it does help.
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I noticed that aswell in a newspaper recently. Found it to be really handy.
 
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