ING Direct under fire for lagging rates

ING Direct has been the target of criticism recently for not passing on recent interest rate hikes from the Bank of England on to the 1.1 million holders of its savings accounts. When it launched its much-advertised savings main savings account in 2003, it said that it was determined to keep it as the best account available. However, it has now admitted that the current rate on the account, at 4.75 percent, is not the best rate available - Landsbanki’s Icesave account currently pays 5.7 percent - while saying that it will not change the rate on that account.

Instead, the savings provider has created another savings account, available only on the internet and called Web Saver, and that the rate on that account will go from 5.25 percent to 5.65 percent. This new account is touted as being for those who wish to manage their savings online and is only available to existing ING Direct customers.

ING blamed its delay in addressing the issue on it being “a big call” for them, and that changing rates is a big decision when it is dedicated to paying all customers a good rate. However, at least one analyst said that ING will likely continue to face criticism for its delay in introducing a higher-yielding account and in keeping the original account at the same rate, given their statements at launch.

Discuss this in the Finance Markets forums

Story link: ING Direct under fire for lagging rates