Ing decrease Rates On Web Saver

GCH888

codetown wrote: »

"The gross Annual Equivalent Rate of Interest (AER*) paid on balances over £250 is guaranteed to exceed the Bank of England Base Rate* by at least 0.25% until 1 October 2009 and thereafter not to be lower than the Bank of England Base Rate until 1 October 2011"

Because I'm too lazy to work it out how much will be the interest rate at ICESAVE if the BoE does raise it's rate to a quarter percent? Does it go up to 5.95% or is it not that simple?

nilrem_2

Obviously it makes sense to switch ones cash out of ING but one does have to take into account the loss of interest whilst the money is in transit which in some cases is greater than the amount gained by switching depending on the difference in interest rates and speed of transit.

In my case I have been switching my ING investments to Icesave but it involves transferring to my current account then doing another transfer to Icesave which can mean up to 8 to 10 days of lost interest.

I want to ditch ING and have already switched half of my savings with them but with the small decrease in interest I think it better to wait until after May10th to see what the rates do.;)

codetown

GCH888 wrote: »

Because I'm too lazy to work it out how much will be the interest rate at ICESAVE if the BoE does raise it's rate to a quarter percent? Does it go up to 5.95% or is it not that simple?

ICESAVE Now: 5.70% AER
ICESAVE May 10th (if BoE rate +=0.25%): 5.95% AER (likely; but guaranteed >= 5.75%)
ICESAVE May 10th (if BoE rate +=0.50%): 6.20% AER (likely; but guaranteed >= 6%)

The guarantee Icesave offers is what let you at ease. Whatever happens until Oct 2009 you will probably have the top paying account (or certainly one of them). And even after that it should be an excellent rate until 2011!

ING is in my view uncompetitive and will be more and more in the future, so the earlier the better for a switch.

GCH888

codetown wrote: »

ICESAVE Now: 5.70% AER
ICESAVE May 10th (if BoE rate +=0.25%): 5.95% AER (likely; but guaranteed >= 5.75%)
ICESAVE May 10th (if BoE rate +=0.50%): 6.20% AER (likely; but guaranteed >= 6%)

Thanks!

Being a realist I'm not holding much hope it'll be a 0.5% rate increase. However with 0.25% this means ICESAVE will offer the same rate as the HSBC online saver account but with the added bonus that there's no £50K limit and no loss of interest if money is taken out.

Any chance that HSBC and A&L will increase their online saver accounts?

codetown

GCH888 wrote: »

Thanks!

Being a realist I'm not holding much hope it'll be a 0.5% rate increase. However with 0.25% this means ICESAVE will offer the same rate as the HSBC online saver account but with the added bonus that there's no £50K limit and no loss of interest if money is taken out.

Icesave and HSBC Online are two different products.
Icesave is almost identical to ING Direct, i.e. extremly simple and no problems with withdraws (as many as you want).

HSBC Online is only for those who will not be making withdraws (as otherwise you loose all the interest). It is almost the same as A&L Direct Saver (which pays 5.8% AER). So different target audience. I would not recommend it to someone switching from ING...

In terms of interest:
- Now
ICESAVE 5.70% AER
HSBC Online 5.75% AER
A&L Direct Saver 5.80% AER

- after the next BOE increase:
Icesave has a guarantee of interest increase as detailed above.
The others will act depending on market conditions (so it is unclear at present).

Any chance that HSBC and A&L will increase their online saver accounts?

Based on experience I would say
- A&L: no (they did not increase last time round)
- HSBC Online: maybe partial

GCH888

codetown wrote: »

In terms of interest:
- Now
ICESAVE 5.70% AER
HSBC Online 5.75% AER
A&L Direct Saver 5.80% AER

You've worked out the accounts I'm currently holding! ICESAVE for easy access without penalties and the other two accounts for the higher interest rate (since I've already reached the maximum for A&L).

I'm pretty sure A&L did raise it's DirectSaver rate from 5.64AER to the current 5.80AER the last time the BoE raised it's rate.

EalingSaver

Aseveryone has said, ING have become extremely cynical. To make a move DONWARDS when everyone knows base rates are about to go up by minimum 25 points is the ultimate! Interesting observation that it might be so they can announce a larger increase when it happens :-(

A few months back I was about to move all my ING into newly opened ICESave (OK, should have done something about it at least 6 if not 12 months prior but at least I was putting all new monies into a different account) when that very day they announced the 'Web Saver' account - itself a tactic I suspect to stop a flood of existing money going out of their coffers. Although it irked me to keep my money with them I reckoned the loss of interest on the time to do the transfer made it a bad option, so opened the web saver and moved all existing monies with them to that.

The sooner banking rules are changed so that banks can't play the 3 working days trick the better. That would certainly lead to a more competitive space as it would remove one of the disincentives for playing the market.

nilrem_2

EalingSaver wrote: »

A few months back I was about to move all my ING into newly opened ICESave , when that very day they announced the 'Web Saver' account - itself a tactic I suspect to stop a flood of existing money going out of their coffers. Although it irked me to keep my money with them I reckoned the loss of interest on the time to do the transfer made it a bad option, so opened the web saver and moved all existing monies with them to that.

That is exactly what happened to me!

nilrem_2

Fantastic, I just visited the ING site and was presented with a survey to ask my opinions on ING!

Really made my day TBH being able to tell them what I thought of them and their award winning interest rates!;)

codetown

GCH888 wrote: »

I'm pretty sure A&L did raise it's DirectSaver rate from 5.64AER to the current 5.80AER the last time the BoE raised it's rate.

I think they did not and I also have that account!
My memory tells me that it was presented by A&L from the start with a rate of 5.80% AER to be a top rate on the market. It was open to the public just a few days (maybe a week) before the announcement of the last rise and after the rise no change to the rate was done. I remember also a thread on this forum by disappointed users who were expecting a rise of this account and were not satisfied by A&L.

Of course my memory might be incorrect, but is is probably safe to say that A&L has been very reluctant to follow rises lately. They prefer to launch new headline products with special limited bonuses and then offer average rates...