ING Savings Account

lisyloo

Work it out over a year and the compound interest is worth more than 0.15%

I have jsut checked INGs website and 4.7% is AER - Annual Equivalent Rate i.e. after the monthly compounding stuff.

Be careful with what you are comparing.

bonecold1

ING pay something like 4.6% interest every month which compounds up to 4.7% over the course of the year. This is why a lower amount of interest is sometimes shown in the best buy tables for monthly interest paying accounts.

lisyloo

It is indeed 4.6% gross.

The details are here.

http://www.ingdirect.co.uk/html/aboutsavings/interestrates.html

Be careful when comparing rates from different accounts to make sure you are comparing like with like.

System

Not allowed to say anything yet - it's embargo'd but wait for my money tip this week for news on this

martin

bonecold1

There are two types of rate

1) A.E.R. rate. This is the important one as it tells you how much interest you will receive on your money over the course of the next 12 months. The A.E.R. figure is often lower than a headline interest rate as the headline rate offers an introductory bonus and then the rate plummets after the intoductory period is over.

2) Gross rate. This is the rate at which your interest is paid. So ING have a gross rate of 4.6% (As they pay interest monthly at 4.6%) which compounds to pay an A.E.R. of 4.7% (as the monthly interest already received is added onto your account balance and used to calculate the next month's interest). Accounts like Alliance & Leicester who pay interest annually have their A.E.R. and Gross rates the same.

However an account with the highest A.E.R. is not necessarily the best one. Say a new easy access account comes out with an A.E.R. of 4.5% and an introductory 6 month rate of 5.5%. You'd be best putting your money into the new account for the first 6 months and then withdrawing your money after the 6 months into the Alliance & Leicester.

System

When does Martin's email come out then! I was about to move my modest savings from ING (4.6%) to Egg (5.25% for 6 months) for a short while. But will now hold off for a while to see what Martin's email says.

(I know, there is no logical reason why all my monies in ING and not Egg -- its just my jampot mentality, the money in Egg is for my new car, the money in ING is for my future!)

Come on Martin, put us out of our misery soon!

bonecold1

My advice is wait until tomorrow for details of Cahoot's new 5.5% savings account!

lisyloo

Come on Martin, put us out of our misery soon!

I am sure Martin will give us the information as soon as he ia able.
As a journalist if he released information early when it was given to him until strict agreement, then he will loose a lot of credibility and not be able to get nformation like his for us in the future.

I am sure he will pass it on as soon as he can.
You'll just have to be patient.

Most companies don't want stuff leaked, they want it don't first in their official press release.

Anyone who breaks this kind of agreement would find it hard to work in the business I expect so obviously he can't do that.

System

All gone quite on the ING front?

System

Yes very. If they want to remain competitive over the next few months they have to raise thier rate to at least 5%.

Ings main philosophy is not to be the No.1 rate setting bank but to offer a rate that remains competitive over a long period mainly targeting casual savers who do not want to keep switching accounts every year.

Cahoot, A&L and Ing are all now in the top 3 for instant access savings accounts.

Does anybody know what rate the Cahoot savings account drops to after the 12month introductory rate ?

As soon as my Cahoot account is activated I will be shifting all my savings from my ING account...which will give me £150 extra interest over 12 months compared to ING.