Susan Gordon, Business Reporter

Michelle Wilson-Reynolds, senior vice- president, group marketing and corporate affairs at Victoria Mutual, says the new iSave product allows clients to save in a disciplined way.

The Victoria Mutual Building Society (VMBS) has introduced a high-interest-saving product called iSave which it underscores is not only more competitive but also a saf on the market to build wealth.

The product is offered through the regular VMBS saving facility and gives members the opportunity to earn interest rates of 12 per cent per annum on a minimum of $10,000 saved every month or a total minimum of $120,000 saved per annum. Interest is calculated daily.

ISave was launched on Sunday and became available on Monday of this week.

'New VMBS'

"We are offering the product through communication of standing order or salary deduction," said VMBS' senior vice-president of group marketing and corporate affairs, Michelle Wilson-Reynolds.

While the product's returns fail to match the six to 18 per cent per month on offer by high-yield unregulated investment schemes, Wednesday Business checks show that VMBS's annual 12 per cent interest rate is on average, 2.5 per cent to three per cent higher than those offered by the money market institutions.

"Our customers are saying we need help to save," said Wilson-Reynolds.

The company also intends to launch a foreign exchange component of iSave, giving members the option of saving in sterling, Canadian or U.S. currencies.

"This is a new VMBS," said Wilson-Reynolds.

Guaranteed and safe

She said the 12 per cent interest was guaranteed and safe. The member also has the option to contract to save more than $10,000 per month.

The interest rate applications compare favourably with banks who often calculate their annual interests on savings accounts on a quarterly basis using the minimum monthly total in the account on which to make calculations.

Reynolds said the 12 per cent rate would remain on offer as long as it stayed competitive.

"We are targeting new accounts from existing customers and we anticipate new accounts from new members," she said.

Feasible product

In response to question of how the society could afford such rates when interest rates on savings instruments in the formal economy were trending down, Wilson-Reynolds said market research showed that the product was feasible.

"It can be offered on share loans for cars, education or even home improvement and the pay back interest rate would be 16 per cent which is competitive considering consumer loan rates," she said.

susan.gordon@gleanerjm.com