Turn Pence into Pounds like Magic

Personally, I'm a lazy saver - Although I'm not a particularly great business woman, I do like my pounds to earn a bit when I'm not looking. I have to admit, ING takes care of several pence while you look after the pounds (or perhaps I've mixed up that metaphor…..)


ING offers perhaps one of the most competitive interest rates around; at the time of writing this review it's 4.75%. The interest rate does fluctuate when the Bank of England adjusts its straps, but ING always seems to offer a higher than average rate if you compare similar companies. (You can do this easily if you go to www.moneysupermarket.co.uk and click on "savings accounts". You can compare with different criteria like online banking, high street, instant access and so on.)

I have never been a finance guru, but when I heard that most banks' "savings" accounts offer just less than the average rate of inflation, I started thinking. So, my bank offers 3% per year on my savings, and inflation (for example) is 3.1%, instead of earning any money, I'm actually losing. (Well, it's better than keeping it under the bed but hey…)

I'll try to keep it simple! (Stay with me!)

Imagine you had £1000 spare. You could either invest it, or buy some twogs (a twog can represent anything you'd like to buy). Let's see what happens over 2 years:

***Year: 2005-2006****
Amount invested: £1000
Interest rate =2.5%
Investment after 12 months=£1025.

Cost of 1 twog=£1
Inflation is 3%
Cost of 1 twog after 12 months=£1.03

Number of twogs you can buy with £1000= 1000
****Number of twogs you can buy after 12 months= 995 (i.e. less twogs than when you first invested.)****

***Year 2006-2007***
Amount invested: £1025
Interest rate=2.5%
Investment after 12 months=£1060.90

Cost of 1 twog was=£1.03
Inflation is 3%
Cost of 1 twog after 12 months=just over £1.06

***Number of twogs you can buy at the end of 2007= 990.***

As you can see, your money is actually losing value each year unless the interest rate is constantly above the rate of inflation. ING's rates are always above the inflation rate, so you know your money is working for you. They say they can pay you more interest because they don't have the overheads associated with high street banks, and they have no intention of opening any branches- fine by me if I get more interest!

***Setting up an Account***

ING accounts are quite easy to set up. They are initially done over the Internet, but then you are required to submit proof of your tax number (National Insurance) by post, which is a bit of a drag. (You may need to send bank statements or utility bills as proof of your address, particularly if you have lived at your address for less than 3 years.) You can then set up links between other bank accounts, which means you can transfer money painlessly, once the link has been established. You'll need to set up a "regular saver" link- a fixed amount sent from one of your other bank accounts into ING each month. The minimum payment is £1, which is very reasonable I'm sure you'll agree! You can change this amount whenever you like to whatever you like. Then you just sit back and watch the interest payments! In order to set up the links between your other accounts, you just need to fill in an on-line form. You'll need the sort code and bank account number for your other account. The link is not created instantly for security reasons. ING will write to you confirming that a direct debit instruction has been set up between your ING and other bank account, detailing all the numbers and codes. If all the details are correct, you can just sit back. If anything is wrong you need to tell them ASAP. The process takes around a week, and you won't be able to transfer money until you've received the paperwork.

***Managing your accounts***
You can set up any number of links between ING and other accounts you have. I've got mine linked to my personal bank account with Lloyds, and my joint account with Barclays. You can also very easily create separate accounts within your main ING account. This is really useful, as if you're saving up for a few different things, you could, for example, have an account for your holiday savings, one for your car repairs and another for a rainy day. You can name the accounts whatever you like, so it's really simple to pop a few quid away in the right place without getting confused by account numbers. Once you've established the direct debit links between your bank accounts, if you want to transfer money in or out, you can do so online. If you prefer you can do it by phone, but I find the online banking very simple and, (I believe), safe to use. You simply choose the account you want to transfer to/from, type in the amount you want, and click on confirm. Nothing more to it. The transfers should take place immediately, (if less than £10,000, 3 days if over this amount), but this does also seem to depend on the bank the funds are travelling to/from. Payments might show up straight away, but as uncleared funds. I haven't calculated, but I think you only get the interest payments once the amount has cleared. This can take about 4 days, sometimes longer for a cheque. If you want to send a cheque, you make the cheque payable to yourself, and write your account number next to your name (you get different account numbers for each new "piggy bank" you set up. So, using the above example, you'd get different account numbers for the car repair account, the holiday account and so on). You don't need to send any forms or other bits of paper with the cheque- just pop it in an envelope and send it Freepost. Bargain! The address is:

ING Direct, Freepost NATW1784, Reading, RG6 1BR.

***Logging in***
The logging in process is a little long, but this is only for security reasons. You are assigned a customer number which is 9 digits long (you'll probably have to write it down somewhere). You are asked for this number first. Then you need to choose a pin number, which should be 6 digits (you'll be assigned a random one first, which you can change to something more memorable). THEN you have to enter a memorable date. Lots of numbers to remember, but better safe than sorry! When you enter the pin number you are prompted for only 3 of the 6 digits, as further fraud prevention. If you forget any of the numbers you can request a reminder online, but so far I this hasn't happened to me! You'll also need the pin number if you use the phone banking. You'll be asked to type it in before you get connected to a human. If you haven't got it to hand, don't worry, you'll be connected to a person anyway if you don't enter it .

****Interest Payments*****
Interest is calculated daily and paid monthly. It shows up on your statement on the last day of the month. Every time you log in you'll see the interest rate clearly displayed, and you'll get a notice every time it changes (which is every time the Bank of England changes).


***Using the Website****

The website is very easy to use and easily navigable. It's extremely clear and well designed, and even if you use a slow 56k dial up, everything downloads super-quick. The pages are uncluttered and refrain from trying to flog you other financial products, which I find refreshing. You can check/print your statements, set up new links to other bank accounts, move your money, get their contact details and read their newsletters (not that interesting, admittedly). There isn't a great deal else on the website, except links to their job vacancies! As it's designed for online use, online statements are the norm, but if you prefer, you can also get paper statements sent to you quarterly. (I don't bother personally- printing off the website serves my purposes.)


***Customer Service***

Dealing with situations on the phone has been generally a gratifying process. The staff are friendly and eager to please. On the whole, I have been impressed by the level of service offered by ING. Customer Services is open Monday-Friday 7am - 11pm, and Saturday-Sunday 9am-9pm, call 0800 376 8844- yes, that's free too!


The most important points to know about ING are that, in a short time you can make your money work for you, you can get one of the highest rates of interest (low risk) available in the UK, and if you are at all dissatisfied, you can ask for your money to be returned, no questions asked. But I really couldn't imagine you doing so.

§ Current rate 4.75% apr
§ Instant access
§ Nice website (unless you hate orange)
§ Very professional staff
§ Recommended by top city financial advisors
§ Minimal paperwork, but some is awkward
§ Nothing much else wrong with this company!

Website- www.indirect.co.uk