Is It Time To Switch?

A recent update from ING states that it doesn't plan to raise its savings rate. Is it time to move that cash?

I recently checked my post to find a letter from ING Direct. I wasn't that surprised; a number of banks have raised their savings account rates recently in line with the base rate, so I half expected ING to be informing me that it had done the same. So imagine my surprise when I read that rather than raising its rate, it had written to inform me that it would be keeping it at 4.75% AER - 0.25% less than the base rate!

Now, it's important to add that whilst telling me of its decision to maintain the rate on its savings account, ING also wanted to inform me of its new, Web Saver account, which pays a far more generous 5.25% AER. However, there is a drawback - no interest is paid in any month that a withdrawal is made. And it also offers a Fixed Rate savings account, paying 5.3% AER for six months - but take out your money any earlier and you'll forfeit 90 days interest.

I feel I must mention that I've always been a huge ING fan. Its savings account was a market leader when it launched, and I like its no nonsense approach, paying a straight rate with no hidden catches. I'm also a fan of the fact you can open up multiple accounts - ideal if you're saving for a number of different reasons as you can easily filter out money into different pots. What's more, one of its other savings products would probably suit me quite well as I rarely move my money.

However, I'm also a big fan of having instant access to my cash. Even though I'm unlikely to move it around, I like knowing that, should I need to get to it, I can do so without penalty. Which is why I feel now is the time to switch.

And there are a number of great savings accounts out there to switch to. The ICICI HiSAVE account pays a whopping 5.45% AER - 0.7% more than ING, with instant access to your cash for savings of £1+. And Landsbanki's recently launched Icesave account offers the same rate with instant access for sums of £250+. And whilst ICICI found it difficult to cope with demand when the HiSAVE account launched, it has got a lot better - and a point in its favour is that you can call them on a free phone number (unlike most other banks that use those rip-off 0870 numbers).

Other top instant access choices listed by Moneyfacts include Birmingham Midshires' Direct savings account and Sainsbury's bank Internet saver, both paying 5.25% AER on savings of £1+ (Birmingham Midshires will be paying this rate from Friday 1 December). And, similar to ING, the Sainsbury's account offers the option to open multiple accounts.

Of course, if you are thinking of switching and haven't already done so, you should consider using your mini cash ISA allowance. You can stash up to £3,000 in one of these each year, and earn interest, tax free. And it's worth noting that even non-taxpayers should consider using their ISA allowance, to protect your cash should you become a tax payer in the future.

So, to conclude, I will be moving my savings in the very near future. But I'll keep a pound in my ING account in the hope that its rate will improve in the near future!

> Find a savings account paying 5% AER+ in our Savings Centre.