paying bank to set up savings account

A question about : paying bank to set up savings account

my mother who is 60 and just retired has been advised by the natwest bank to invest her Ј21000 savings in one of their fund accounts,they advise she will be getting Ј136 per month interest,

but initially she has to pay Ј1000 set up for the fund,and then every year Ј400.00 per annum

i dont want her to be ripped off by any banks,seems a bit steep to me

many thanks for your help

can anyone clarify this is a good move, o r any other ideas

Best answers:

• Hi Wayne,
  First of all no one should have to pay a fee to open a savings account. !From the details you've given in your post, it sounds more like they are trying to sell your mother a 'with profits' fund or some other stock market-linked product rather than a savings account. !
  They seem to be very vague with the details of this product, which makes me suspicious. !Some questions which need answering are:
  - What are terms of the fund they are selling? !
  - How long would your mother have to wait to access her money? !
  - Will your mother incur a fee if she were to withdraw some or all of the money? !
  - Is this product in anyway linked to the stockmarket?
  Personally, I don't think signing up for this kind of thing is in your mother's best interests at all. !She shouldn't have to pay any kind of fee to open an account. !Remember, the account is meant to pay your mother money not the other way around. !The only party who would profit from this product is the bank. !Also, from what you've described, it looks unlikely that your mother would see a return of all of her invested capital. !Your mother's money would probably be tied up for sometime too. !Furthermore, withdrawing all or part of the money could require a fee to be paid. !All of which is eating into the capital.
  My father has recently retired. !He is keeping a proportion of his money in cash held within easy access accounts for emergencies. !You can find a table of the best savings accounts from https://www.moneyfacts.co.uk/. !
  Almost forgot to add that now your mother is retired she could get her interest paid gross (without tax deducted). !She should fill out an IR85 form and take it to her bank/building society. !You can download the form from: https://www.inlandrevenue.gov.uk/forms/r85.pdf or you could get one from the bank/building society or tax office.
• Yes it sounds like a with profits fund. My mother has several. They have been doing particularly badly over the last few years. She may have well just shoved all her cash in a high interest account and left it there, she would have been better off.
• thanks for the info, i will be going to the bank with my mother to ask the relevant question,i will let you know how we get on