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Last Updated: Saturday, 2 December 2006, 14:25 GMT
Rate freeze annoys ING savers
By Paul Lewis
BBC Radio 4's Money Box

ING e-mailed customers to explain the reason for the rate freeze
Customers of a bank that once offered a best-buy savings account have expressed their anger after it told them it would freeze the interest rate paid.

ING Direct has refused to raise the rate on its instant access savings account after the Bank of England increased base rates to 5% on 9 November.

ING told its UK customers by e-mail that it has decided to maintain its rate at 4.75% as customers preferred "to be earning consistently".

But account holders have expressed their annoyance and disappointment to the BBC and many say they will move their savings.

One ING customer, Mike Williams, told BBC Radio 4's Money Box programme: "I can't believe that any intelligent saver would wish to have a lower rate of interest particularly from a company that over the last couple of years has made the point how good their savings rates are.

"I think their customers deserve better."

Another told Money Box: "I have been with ING from the start but have been so disappointed with their holding the rate that I've already moved my money elsewhere."

Emphasis on consistency

Martin Rutland from ING told Money Box that the decision had been made with customers' best interests in mind.

"Everybody would like their savings company to offer the best rate all the time. But clearly that's not possible so that's why we put so much emphasis on consistency."

In the e-mail it sent to customers on 30 November, ING said: "While some may be willing to follow headline-grabbing rates, we know from talking to our customers that the majority prefer their savings to be earning consistently...

"On this occasion this means we have made the decision to maintain our ING Direct Savings account interest rate at 4.75% AER."

I've just moved a very large sum to a competitor offering me 5.45%. Enter the real world Mr Rutland
Salvador Potter

That argument was called "pathetic", "arrogant" and "patronising" by listeners who e-mailed Money Box.

ING's e-mail also contained a table of "Top 20 providers" from an independent research body which showed ING Direct top of the list with its offering of 4.75%.

But the table was dated 6 November, three days before the Bank of England raised interest rates.

According to rates comparison service Moneyfacts, eight out of 10 savings providers had raised their rates by the time the e-mail was sent. Martin Rutland denied that made the table dishonest.

"That table... takes all of their savings accounts and says 'what's the average rates those 20 companies are offering?' It shows the average rates of all the accounts they offer," he said.

"It's a table designed to say - if you stay with most of our competitors they will not have our record on consistency," he added.

When ING opened its account in the UK in May 2003 the interest rate was 0.55% above the Bank of England base rate.

This latest freeze means it is now 0.25% below the base rate.

The current best-buy accounts are HiSave with ICICI and Landsbanki's Icesave account, both of which pay 5.45%, HiSave from 1 and Icesave on at least 250.

HiSave guarantees to beat the Bank of England base rate until 31 December, 2007.

And Icesave promises to beat it until 1 October, 2009 and match it for two years after that.

BBC Radio 4's Money Box was broadcast on Saturday, 2 December 2006 at 1204 GMT and will be repeated on Sunday, 3 December 2006 at 2102 GMT.

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