NothING ventured, nothING gained

By HELEN LOVELESS, MAIL ON SUNDAY ENTERPRISE EDITOR
Updated:

 

ING has cut the interest on its flagship best-buy savings account only four months after launching and promising its barnstorming 4.22% was 'not an introductory rate'.

The Dutch banking group hit the headlines four months ago with the internet and telephone-based ING Direct account paying table-topping interest on balances as low as £1, but this will fall by 0.2% from 1 September.

In May, chief executive Lindsay Sinclair, said: 'This is not an introductory rate. We have low overheads and no branches and this saves us money. We pass those savings directly to our customers.'

Savers are likely to be disappointed to see the rate fall so soon after the account was launched, as predicted in July by the Mail on Sunday and This is Money.

Will Cairns, spokesman for ING Direct, refused to say how many customers would be affected, but defended the cut as 'necessary to remain consistent in our approach'.

He said: 'We entered the market with high rates and we will remain in the best-buy tables in the long term and not just in the immediate future.

'Despite a reduction in the base rate not only have we not passed on the full cut of 0.25%, but we have also waited several weeks to reduce our rates.'

Yet Cairns could not rule out further cuts in the near future. 'If the base rate goes down again we would review the situation although we want to keep rates as high as possible.'

ING Direct is not the only one to slash rates. Abbey National recently announced it was to cut the interest rate on its eSaver account from 3.7% to 3.5%, from 1 September 2003, hitting existing customers hard.

At the same time it is to increase the bonus rate (payable for the first six months after the account is opened), on the account by 0.15%, from 0.35% to 0.5% - in a bid to attract new business.

ING - Too good to last

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