At the commencement of the Bank on September 1st 1919, customers placing their deposits had no choice as to what type of account would
hold their cash. There was only one Account Type: a simple, passbook-based, interest-bearing savings account.
Funds in these original
accounts were classified as being in the General Savings Department. The provision by the Bank of only one savings facility continued
unchanged until April 1st 1957, when a second savings department was introduced.
In his budget speech in the House of Commons on April
17th 1956, the Chancellor of the Exchequer (Harold MacMillan) proposed to exempt from Income Tax the first £15 of income accruing
to an individual from deposits in the Post Office Savings Bank and the Ordinary Department of the Trustee Savings Banks.
The choice to depositors of a third department became available in 1967, as the following extract from the Bank's
Annual Report and Accounts for March 31st 1967 illustrates:
During the Bank Year under review the necessity to offset the adverse balance
of trade and to strengthen sterling resulted in the introduction of measures to control prices and wages. At the same time a high
Bank rate has resulted in extremely competitive conditions in the field of savings. It was, therefore, opportune that after prolonged
negotiations with HM Treasury the No 3 Investment Department was opened as at the 1st January 1967 and thereby another milestone passed
in the history of the Bank.
In the three months January 1st to March 31st 1967, the sum of £3,883,581 was deposited in Investment
Department No 3
. For subsequent total year end balances: click here
All three of these account types were passbook based. Later
in 1967, a cheque book facility was introduced with the opening of the Current Accounts Department
On October 1st 1969,
the Government introduces a Contractual Savings Scheme (known as the Save As You Earn Scheme or SAYE), but the Bank acted only as
an agent for this scheme, and balances were not held on its Balance Sheet. Details at SAYE
On January 1st 1974, a second Interest
Tier was added to the No 3 Department - the 1st Tier paying 8% on deposits subject to one month's notice of withdrawal; the 2nd Tier
paying 9½% on deposits subject to six month's notice of withdrawal.
Term Deposits were introduced in 1976 - fixed sums deposited
for a fixed term, at a fixed rate of interest. At this time the BMB had become the Birmingham Municipal Trustee Savings Bank, and
from November 20th 1976, a new Department was formed by the merger of the No 1 (Savings), No 3 (Investment), and Current Account Departments
- known as the New Department, while the No 2 Department became the Ordinary Department.
The growth of balances is detailed in
the following sections:
details relating to Deposit Accounts:
Details of the limits governing Deposits and Withdrawals etc
Record of Interest Rates Paid