ING Direct to cuts savings interest rate

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The Independent Online

The move will disappoint savers who flocked to the bank after its launch in the UK in May 2003. ING's entrance to the savings market has encouraged competition between account providers in a period when interest rates have hit a post-war low.

The cut is especially bad news for savers, because although ING no longer offers the highest possible savings rate on the market, its 5 per cent deal is a "clean" offer. Most rivals artificially boost their headline interest rates by offering introductory bonuses for a limited period - savers must switch to a new account to find a better deal once this ends.

However, a spokesman for the company said: "ING Direct's approach is all about openness and clarity. It is in this vein that we are giving advance notice that our rate will move to 4.75 per cent." ING pointed out that savings rates across the market have fallen amid expectations that the Bank of England will cut base rates during the second half of the year.

Two building societies - Yorkshire and Nationwide - are still offering 5 per cent with no introductory bonus on their internet-based savings accounts.

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