Bank goes online with high rates

Savers were today being offered a new place to stash their cash, as Dutch banking group ING launched its web and phone-based operation in the UK.

ING unveiled its Direct Savings Account this morning, offering an interest rate of 4.3%, one of the leading rates on the market.

"We have low overheads and no branches and this saves us money - we pass those savings directly to our customers in the form of high interest rates," said Lindsey Sinclair, chief executive of ING Direct UK. He added that the savings rate will remain in place for the foreseeable future and is not an introductory offer.

ING has already launched its internet arm in seven other countries outside of the UK, and claims to have six million clients worldwide, adding 300,000 new customers a month.

The bank will be competing directly with existing online banks such as Egg and Abbey National's Cahoot.

ING's savings rate tops the table for internet-only accounts, above Halifax and Citibank's rate of 4%. Egg offers an internet-only rate of 3.75%, while Cahoot pay 3.83%. The Dutch bank says there will be no minimum deposit level for customers, no tiers to the account - in other words one interest rate for every customer - and no withdrawal notice period.

"Our whole strategy is based on providing simple products with maximum value for customers," said Mr Sinclair.