Savers move money from ING Direct

Wealthy savers have moved £3bn from ING Direct

Savers have shifted £3bn out of accounts at internet bank ING Direct since it refused to pass on two interest rate increases, the bank says.

Last week ING said that from 1 June it would pass on the latest rate rise announced by the Bank of England.

But its standard savers rate, at 5.0%, will still lag behind its rivals by about 0.5%.

When ING started up in the UK in 2003 its rate was more than half a point above the Bank of England base rate.

With its Direct Saver account offering a return of 4.3% - 0.3 percentage points more than rivals such as the Halifax and Northern Rock - ING attracted both customers and publicity.

"Playing the game"

Since then, however, it has been overtaken in the best-buy tables as a result of its deliberate policy of not passing on two rate increases - one last November and one in January.

An ING spokesman defended its policy, claiming that it had not wanted to "play the game" of trying to stay at the top of the savings account league.

"Are there better rates out there? Yes there are," he said.

"Do those companies pay all their customers the same rate? No they do not.

"We are trying to be consistently fair with all our customers so 5% is the highest and the lowest interest rate they will receive."

ING admitted that the customers who had moved their money were mainly those with large savings, who would benefit most from higher rates elsewhere.