If it seems too good to be true ...

Sadly, this piece could have been written over and over again. Scammers – or let’s just call them thieves – from Bernie Madoff to anonymous teenagers in darkened bedrooms, would like to get hold of your money.

There are all sorts of ingenious ways of doing this, but one of the simplest is to offer something that’s so attractive, savers don’t notice that it just doesn’t quite stack up. 

With interest rates falling, the return that these fraudsters have to offer to attract people is falling too. An interest rate which would have barely merited a look a year or two ago is now enough to look tempting.

The latest warning into my inbox is from Fidelity International, warning of a fake “Fixed Interest Investment ISA Bond” being marketed in their name, which offers a return from 2.75% - 5.75% return. Of course, the actual return for those unlucky or unwary enough to fall for this is a guaranteed loss of all money – a return of -100%.

It’s not so long ago that those rates would have looked low enough to be plausible. But a quick check on any savings comparison shows that the top rate currently available from a genuine savings institution is around 1.5%, for a five year fix. 

Even 2.75%, now, is too good to be true.

This article does not constitute advice, and no action or lack of action should be taken as a result of what is written. You are strongly advised to consult your financial adviser or a solicitor before taking any action relating to the matters discussed in this article. The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested.  Past performance is not a reliable indicator of future performance.