Flying pigs - but do these banks really bring home the bacon?

Promises of high interest rates on savings accounts by upstart new entrants hoping to take on the banking giants are nothing new.

The most notorious recent examples include Zurich Bank and French-owned First-e, both of which launched amid much fanfare with pledges that their rates would beat the competition, only to disappear almost as quickly as they had arrived.

Zurich, with its now infamous £20m "flying pigs" adverts, promoted itself by claiming it would guarantee savers a high rate of interest "for life" by tracking the Bank of England base rate.

However, the thousands of people who signed up were left bewildered when the bank shut its doors altogether a year ago, giving them back the cash they had put in plus a goodwill payment for the "inconvenience".

When the bank shut its doors to new customers, its savings rate stood at 3.45%. But there were better rates around at the time, so those abandoned by Zurich were not completely out in the cold. People with slightly longer memories will also recall the First-e fiasco. The French internet bank launched with a headline grabbing rate of 6.06% (with a 0.81% introductory bonus for six months) back in 1999. But within a year, the headline rate had disappeared in a fog of tiered rates and by September 2001, when the outfit closed down, its savers were earning 4% interest.

In this context, ING Direct will need to work hard to convince savers that its initial high rates are more than a mere marketing tool. ING says customers need look only as far as the rates they offer in other countries.

"We are still on the best buy tables in those countries we are established in," a spokesman says. "Our objective is to offer consistently high rates."