§ The Earl of Kimberleyasked Her Majesty's Government:
Whether they consider that the Post Office's current policy of not accepting deposits of less than £5 into any savings account, including children's accounts, encourages or discourages thrift in young people.
§ The Minister of State, Department of Trade and Industry (Lord Hesketh)The £5 minimum deposits to which the noble Earl refers were introduced by the Department for National Savings for their investment account in April 1985 and their ordinary account in January 1989. These were sensible and prudent measures taken to reduce the running costs of national savings. The cost of taking any National Savings Bank deposit at the Post Office counter is well over £1 in agency fees alone, so it clearly is not good business practice to encourage very large numbers of very modest transactions. The Government does not believe that a £5 minimum deposit in these savings accounts is a disincentive to thrift. On the contrary, we believe that the fact that a child depositing £5 in an investment account will get exactly the same attractive76WA rate of interest, 12.25 per cent. per annum gross (from 28th March), as an investor with a balance of as much as £25,000, is a very positive incentive to the savings habit.