Ing Direct

Greycrow

ING are just a bit too clever.
They've obviously reached their launch target figures for customers and and funds and now feel that they can start paying more mundane rates on the assumption that most investors wont be bothered to change.
I've withdrawn some funds but am waiting,before moving the rest, to see if the new year and the recent freeze on the base rate will produce more attractive schemes from other institutions.
I am not inclined to close the ING account but rather to leave a small amount like £1 there. It will be simplier to move money back in later, should I wish, and it will cost ING to maintain the account. It's our money and we can play clever with it too.

Rhino666

It's always a good idea to leave £1 in savings accounts when you transfer elsewhere. Most are fickle when it comes to interest rates and if they do become competitive again it is usually only a case of doing a quick BACS transfer to return your money to them. Openng a new account will involve form filling, supplying ID, etc and takes a fair bit of time and effort.
A drop of 0.25% is equivalent to a days interest lost every 19 days, if the higher rate is 4.75%. It usually means a loss of at least 2 days interest when transferring so needs to be weighed up.
I would also recommend doing BACS transfers on a Monday/Tuesday so that there is little chance of the transfer taking in non-banking days on a weekend.

CrazyChemist_2

I'll be clicking "Transfer" on Monday me thinks Don't want to give those bankers in bowling hats any more time with my money than is necessary.

Ted_Bloke

Judi wrote:

Yes i ditched mine when they dropped their interest rates. I sent a letter off to ING yesterday asking them to close my account.

Yes I ditched mine too. But like Esalan I left a small amount in there - that also costs little.
ING wasn't too bad, it was consistent, it was simple and I kept substantial cash there for a couple of years or more, it's now not the best but still good, maybe good for people who can't be bothered to be moving their money about. I'm not going to rival George Soros when I move cash from ING to AllyLeics, Brad'nBing or Hfax. However, even without being a Mad Maverick MoneySaving Maniac I think is really good that savers send signals to banks, even if only with their feet. Because I believe the banks' calculation is: lowering our rates will unfortunately diminish the inflow of new savers, fortunately it won't cause many to leave us because of inertia. So it is healthy if they see a big bunch of us leave them as soon as they cut their rate below the competition.

But if you are a maniac money saver watch out for the following: the difference between one and the other bank/institution is of the order of 0.2%. But at around 5%, that is 2 weeks of interest. So if you're going to transfer, you'll make a slight benefit only if the money gets moved quickly and not lie around in an ornery low-yielding bank account for any time. (Some of us have these accounts we have to use for the transfers while not keeping much money in them.) And this idea that it's quick and no hassle to set up new accounts is a bit of a myth in my experience. So what I do is always send ahead a 'scout'. That is if you open a new account, because of the time you lose in doing so, make the first transfer into it a small amount until you see the transfer system working.

Coming back to the no-hassle of new accounts, I've had quite some practice and I don't think I've yet done a smooth trouble-free opening without delay, maybe one. While even an organisation you've been with for decades checks who you are, while letters go back and forth about this and that, your utility bill is three months and five days old it has to be less than three months, and they lost your cheque oh no they've found it but now they have to send it you back and there is one lot of letters and procedures about the account but another lot for the internet operation and they send you a letter to say that they are going to send you a letter and that letter arrives and it says they are going to send you a letter and then that arrives but you are away and it couldn't be delivered and another time it was your fault you forgot to sign on that other page so by the time you correct this something else had passed a deadline and you have to start again then you're on holiday and can't attend to… - - OK I'm away from home a lot but am I the only one anything like this happens to?. Well I want to encourage people to move around, I'm just saying there are some reasons for inertia. To overcome it I recommend keep a token sum in several top providers and then its no hassle to move the money around.

al_yrpal

I must admit I am pretty annoyed with ING. First at the crafty way they dropped their rates after the introductory period, second and third when they pre-empted interest rate cuts before anyone else did. All the while claiming they are gods gift to savers. What a shabby misrepresentation.

If they have 14 million customers with an average of £1000 each on deposit. Thats £14 billion! Work out 1/4% of that divided by 12 and its about £2.5 million per month in their coffers (I think).

I left £30 quid in there, but if its a choice between the honest and straightforward way that Nationwide do business at the same interest rate and the crafty, take advantage of consumer inertia as practiced by ING Direct, it will be Nationwide every time for me.

Martin shows no mercy with banks and their tricks, neither do I.

BTW you can suffer a four day delay moving funds across weekends

rrwfotr

HI I've got some funds in ING and also have account with ICICCI. Do you guys think it's worth transfering my funds to ICICCI is it worth the 8 days loss in lost interest (over weekend)....

Milarky

Whatever the amount you move out it takes the same number of days to recoup lost interest as it is determined by the difference in rates only.

I see that ICICI now pays 5.15% compared to ING's 4.5%. Why does it take eight days? and why move money over the weeked if you can avoid this - Doesn't ICICI take money from your bank by direct debit lik ING does?

(From ICICI:))
We will ask you to nominate the account from which the funds will be transferred, and through the Site make a direct debit request for the specified amount of funds to be credited to the Account.

Assuming you can move money in a minimum of 2 days, the time it would take to recoup the loss of interest is about (2 days x 4.50%) divided by (5.15% - 4.50%). That's 9 'percent-days' divided by 0.65 'percent-differential' or about 14 days... If you're taking a hit and earning no interest whatever for 8 days, then it's 8 weeks before you recoup the cost of it. (8 weeks interest just to move your money! You've got to try and improve on that!)

Back to the timing of the transfer. I'd suggest you moved your money out of ING on a Monday only (to avoid the weekend). Note these can be set up with future dates anyway. Have ICICI take an equivalent amount from your bank on the Wednesday - the day the money reaches it from ING - BUT ONLY up to your overdraft limit as the money arriving is not automatically reconciled with the amount being drawn and you could end up with a 'returned debit' problem and a fee.

Thus the only way to 'safely' move all the money appears to involve one weekend (but not two). Move from ING on a Monday or Tuesday and set up in advance to move to ICICI on the corresponding Wednesday or Thursday - that way you have cleared finds in your bank overnight between the two payments. This works out at about 4 to 5 weeks to recoup (depending on whatever rate of interest your bank pays you for the 1 day the money sits there)

If your bank pays you a reasonable rate of interest anyway then you can do better by moving the money to it on a Wednesday and collecting from it the following Monday - which means you lose the two days interest on the move plus the difference in rate between your bank and ICICI while it waits over the weekend.

For instance, at 3% bank ING is plus 1.5%

Thus lost days = 4.50% x 2days PLUS 1.5% x 3days = 13.5 '%days', which takes exactly 3 weeks to recoup.

HTH

EDIT: As an alternative, you could do a 'CHAPS' same-pay payment from your bank to ICICI to avoid the lower rate over then weekend. (I've checked and ING won't do a CHAPS direct). If It's £20, say then if your bank pays you less than 2.28% gross (or 1.32% if you pay 40% tax on income) it is worth CHAPSing on a Friday. If it is £25 these figures would be lower - at <1.56% and <0.37% respectively. If it is £30 they are lower still - at < 0.85% and <0%. So unless your bank pays less than 2.5% it isn't worth using CHAPS either.

pavlovs_dog

with the nationwide account, do you need to have a current account with them?

pavlovs_dog

as an aside, the only thing that really gets my goat is how often they take their website offline for maintenance etc - never have that prob with any other companies i bank online with.

i appreciate the honesty about changes to the interest rates, at least they have been upfront about it. will see how the situation goes for time being. they are, by and large, convenient, so unless things change again i doubt im too likely to change

YorkshireBoy

pavlovs_dog wrote:

with the nationwide account, do you need to have a current account with them?

how do I pay money in?
All payments to your e-Savings must be from a FlexAccount, Nationwide's current account, via our online Internet Bank service.

http://www.nationwide.co.uk/savings/e-savings/banking.htm