ING savings conditions are changing: The Barefoot Investor’s tips for customers
From March it's going to be harder to earn bonus interest on your ING savings account.
ING is changing the conditions to earn bonus interest on its popular ING Savings Maximiser account. The bank is adding another condition that customers need to meet to be eligible for extra interest each month.
ING, at the time of writing, is offering a total bonus interest rate of 1.35% p.a. on balances up to $100,000. This rate isn't bad in today's low-rate environment; however, there are a few things customers need to do to get it.
You need to link your account to an ING Orange Everyday account, deposit $1,000 per month and make 5 or more debit card transactions from your ING Orange Everyday account each month.
From 1 March 2021, you'll also need to grow your ING Savings Maximiser balance each month on top of the existing conditions. This means your balance at the end of the month always needs to be higher than it was at the start. So if you're currently meeting the monthly deposit requirement but you're taking the money out each month, you'll no longer earn bonus interest.
With the upcoming changes to ING's savings account, The Barefoot Investor (Scott Pape) says customers could be better off switching accounts. In his weekly newsletter, Scott Pape responded to a reader's query and agreed the account was getting more complicated.
"I was attracted to them because of the simplicity: they paid a leading interest rate, with no fees. Unlike other offerings, they didn't play those teaser rate and 'bait and switch' games. Well, until now," he wrote.
Pape said he phoned ING and the bank confirmed they plan to increase the interest rate offered as they add another condition to meet (we'll be keeping a close eye on this at Finder).
So with this in mind, if you're an ING customer, are you better off staying put or switching?
Pape said if you can meet the extra condition of growing your balance each month, you could be better off sticking with ING for the higher rate (assuming the bank does increase its rate). But if you've been using the account to deposit the required $1,000 a month and take it straight out again, Pape says you could be better off switching to a bank that isn't playing these "silly games".
If you're thinking of switching, the highest bonus rate in the market right now is 3.00% p.a. with the Westpac Life savings account. This rate is available for customers aged 18-29 on balances up to $30,000. While the rate is much higher, just like ING, you need to grow your balance each month, keep your balance above $0 and make 5+ debit card purchases a month. However, there's no set monthly deposit condition to meet.
If you don't want an account that requires you to grow your balance each month, the MyState Bank Bonus Saver account doesn't have this condition. It offers the same bonus rate as ING at 1.35% p.a., but you only need to deposit $20 and make 5+ debit card transactions per month.
If you haven't checked your savings account rate in a while, it might be time to compare. Take a look at the current high interest savings account rates and consider switching to earn more interest on your money.
