ING Direct

Should be perfectly alright. It's a big bank.

Rob Graham

On Sat, 6 Mar 2004 15:40:37 +0000, Robin Graham wrote (in message ):

"Should..." ;-o)

That's what I thought.

Thanks

Bitstring , from the wonderful person Tips said

I think you mean 'losing'. However I believe the account is covered by the same deposit guarantee scheme as the other UK banks & B/Socs - 100% of (iirc) the first £2k per depositor, and 90% of the next £33k. More than that and you are on your own.

ING are members of the Financial Services Compensation Scheme:

Taken from their website under legal:

If we cannot meet any of our financial responsibilities to you, you can also get a statement describing your rights to compensation under the Financial Services Compensation Scheme by writing to: The Financial Services Compensation Scheme, Seventh Floor, Lloyds Chambers, 1 Portsoken Street, London, E1 8BN.

Most deposits held with our UK branch are protected by the Dutch Central Bank's deposit protection scheme (Investor's Compensation Scheme) and are given extra protection by the UK Financial Services Compensation Scheme (FSCS). Payments under the Dutch scheme are limited to the first 20,000 euros (or the sterling equivalent) of your total deposits held with us. Payments under the FSCS are limited to 100% of the first 2000 of all your deposits with us, plus 90% of the next 33,000 of your total deposits with us, less any payments to you under the Dutch scheme. In practice, this means that each of our customers with deposits at our UK branch may be protected by up to 31,700. In this way you are no less protected than the customer of a UK bank to which the FSCS applies.

On Sat, 6 Mar 2004 15:52:32 +0000, GSV Three Minds in a Can wrote (in message ):

I do indeed. :(

I thought that was the case but just required a little reassurance.

Thanks to everyone who replied.

ING Direct came to me attention recently. They *appear* to be the real deal, and so I am inclining towards opening an account with them.

At an interest rate of 4.5%, one wonders how they do it. Let's hope the answer doesn't eventually turn out to be "they can't". I know their mantra is "we don't have high street branches, blah, blah, blah"; but I heard that most banks operate on wafer-thin margins. So if most banks can't give rates nearly as high, then how can ING? Anyone remember BCCI!?

Bitstring , from the wonderful person Mark Carter said

4.5% isn't that much out of line with what the better BSocs are offering on ISAs, for instance, and they =have= got branches. Yes, it's attractively good, but no, it isn't 'unbelievably good' .. not compared to the rates you (or even Vodafone, or BP) would have to pay to borrow money.

What makes me wonder is where does all the money go - ING Direct only provide savings accounts in the UK. I am not aware of them lending to the UK domestic market (loans, credit cards, etc) and the ING Group website doesn't provide any indication of UK domestic dealings, only commercial. My guess is that all the alot of the money coming from UK savers is going to fund commercial borrowings within the UK and overseas. I do note that, ING Group have adopted the Equator Principles so their lendings (our savings) may be more ethical than most, perhaps?

I don't think there's any question of fraud, but in the long run the answer is almost certainly "they can't", high rates from a new provider are a loss-leader to buy market share - no different to the millions they're spending on advertising. Since they start with a total balance of zero the effective cost at the start is not that great; if they find themselves with a million customers with an average balance of £20k I confidently predict that the rate they offer will fall.

That isn't quite the point, though. As a large bank they can borrow money wholesale at a little over base rate, and branches or no branches that's cheaper than retail banking if you're offering 0.5% over base. To make the whole business worthwhile they either have to be able to source funds more cheaply than the money market after all costs, or use the savings account as a lever to sell other products which do make a profit. (It might be interesting to look at egg's annual report to see how it balances out for them.)

I bet they can't borrow it any/much cheaper than BP, Vodafone, etc. 'little over base rate' may well come to more than the 4.5% they are paying. BSocs can also borrow wholesale (within limits) and they still manage to make a living paying 4.25% to depositors and charging 5.5% to borrowers.

No signs of ING doing that, so far.

I confidently predict it won't - ING are making such a big song and dance about their rate that they'd be fool hardy to change tactic. Knowing how fickle the average saver is these days, they would leave in droves to another more lucrative financial saving product. I don't think ING would take such a big gamble.