ING offers savers lifeline amidst coronavirus crisis

ING offers savers lifeline amidst coronavirus crisis

ING has offered its savers a lifeline amidst the COVID-19 crisis, as more and more Aussies find themselves out of work and/or on a reduced income.

ING is offering customers bonus interest on their Savings Maximiser accounts even if they don’t meet eligibility criteria over the next three months, as long as they met that eligibility criteria in the first three months of 2020.

The announcement should come as some relief for savers who have taken the brunt of the 5 cash rate cuts from the Reserve Bank of Australia since June 2019.

According to RateCity figures, 55 banks have cut rates since the last emergency cash rate cut on March 19. Further, only 6 conditional savings account and 8 standard savings accounts currently have rates at or above inflation.

ING versus the big four banks conditional savers

Savings account Base rate Maximum rate Conditions
ING Savings Maximiser 0.10% 1.80% Monthly deposit of $1,000 and 5 transactions in linked acct
CBA GoalSaver 0.10% 0.50% Monthly deposit of $200, no withdrawal
Westpac Life 0.40% 1.30% Monthly deposit, account balance must have increased
NAB Reward Saver 0.05% 1.25% Monthly deposit, no withdrawal
ANZ Progress Saver 0.01 1.25% Monthly deposit of $10, no withdrawal

Note: rates based on account balance of $25k.

Head of Retail Banking at ING, Melanie Evans said: “The decision to waive regular eligibility criteria for bonus interest recognises that this is a tough time for many Australians who may not be transacting as often or saving as much.”

“We want to assure customers that we understand what they’re going through and we don’t want them to lose out due to factors outside of their control,” she said.

Other banks offering support for savers

Bank of Queensland and ME Bank are also offering customers similar support.

Bank of Queensland has paused the need to make 5 or more eligible transactions from its linked Day2Day transaction account for the Fast Track Saver and Fast Track Starter Account (kids’ saver). This condition has been paused until 31 August 2020.

Similar to ING, ME Bank customers with an ME online savings account who qualified for bonus interest in any of the past three months, will automatically receive the bonus interest rate (currently 1.80%) for the next three months.

  • If your savings account provider hasn’t announced a relief program that includes savers, or if you’re no longer happy with your savings account rate, it may be worth doing your own research to see what options are out there.

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Learn more about savings accounts

What is a savings account?

A savings account is a type of bank account in which you earn interest on the money you deposit. This makes it one of the easiest and safest investment tools.

Can you set up direct debits from a savings account?

It’s not usually possible to set up a direct debit from your savings account to cover ongoing expenses or bills, as savings accounts are structured around growing your wealth by earning interest on regular deposits, and discouraging withdrawals.

Some transaction accounts allow you to set up direct debits and also earn interest, though you may not enjoy as much flexibility as a dedicated transaction account, or get as high an interest rate as a dedicated savings account.

Who has the highest interest rates for savings accounts?

As banks frequently change their rates, the most accurate way to know who currently has the highest interest rate is to use a savings account comparison tool.

How do I open a savings account?

Opening a savings account is a relatively simple process. If you’ve found an account with a suitable interest rate, you’ll just need to get in contact with your chosen lender via a branch, phone call or hop online to begin the process. 

You may be required to provide:

  • Personal details, including identification (driver’s license, passport etc.)
  • Tax file number
  • Employment details

How to make money with a savings account?

Savings accounts make you money by earning interest on your savings. The more money you deposit, the longer you leave it in the account, and the higher the account’s interest rate, the more interest you’ll be paid by the bank or financial institution, and the more your wealth will grow.

To make sure your savings account makes money and doesn’t lose money, it’s important to maintain a large enough minimum balance that the annual interest earned exceeds any annual fees charged on the account.

Can I overdraft my savings account?

A lot of savings accounts won’t let you overdraw. Some will allow this feature but you’ll need to apply first. It’s best to read the fine print and check with your lender whether this is a feature they offer. It can be a helpful addition, but as your lender can charge you a fee as well as interest for going into negative numbers, it’s best to avoid overdrafting when possible.

How much money should I have in my savings account?

A good rule of thumb when working out a minimum balance for your savings account is to make sure that you’ll earn more in annual interest on your savings than what you’ll be charged in annual fees.

If you’re saving with a specific goal in mind, prepare a budget so the interest you earn on your deposits will help you efficiently reach this goal. Online financial calculators may be helpful here.

What is the interest rate on savings accounts?

As banks frequently change their rates, the most accurate way to look at interest rates on savings accounts is to use a savings accounts comparison tool. When you look at the savings rate check what the maximum and minimum rates are. Often banks will offer you a promotional rate for the first few months which is competitive, but then revert back to a base rate which can sometimes be less than inflation. Ongoing bonus rates are often a safer bet as they will keep rewarding you with the maximum rate, provided you meet their criteria

What is a good interest rate for a savings account?

A good rule of thumb to keep in mind with savings accounts is to look for a rate that is higher than the CPI inflation rate. This number is constantly changing, so check the Reserve Bank of Australia’s page. If you aren’t earning interest above this then the value of your money will go backwards over time.

How to open a savings account for my child?

Some banks and financial institutions allow parents to open a bank account for their child as soon as it is born, and start depositing funds to go towards the child’s future.

Children’s savings accounts generally don’t have fees, and are structured to help develop positive financial habits by limiting withdrawals, encouraging regular deposits, and earning interest on the savings, similarly to standard savings accounts.

How does interest work on savings accounts?

The type of interest savings accounts accrues is called compound interest. Compound interest is interest paid on the initial deposit amount, as well as the accumulated interest on money you have. This is different from simple interest where interest is paid at the end of a specified term. Compound interest allows you to earn interest on interest at a higher frequency. 

Example: John deposits $10,000 into a savings account with an interest rate of 5 per cent that he leaves untouched for 10 years. At the end of the first year he will have $10,512 in savings. After ten years, he will have saved $16,470.

How can I get a $4000 loan approved?

While personal loans and medium amount loans don’t offer guaranteed approval, there are steps you can take to help increase the likelihood of your application being approved, including:

  • Fulfilling the eligibility criteria (providing ID, proof of residency, proof of income etc.)
  • Checking your credit history (you can order one free copy of your credit file per year, and make sure that there aren’t any errors that may be bringing down your credit score)
  • Comparing carefully before applying (making multiple loan applications can mean having your credit checked multiple times, which can look bad to some lenders and reduce your chances of being approved by them)

Can you have a joint savings account?

Yes. Joint savings accounts can be useful for two or more people wanting to combine their savings to meet shared financial goals, including spouses, flatmates and business partners.

Some joint savings accounts require all parties to sign before they can access the money. While less convenient, this extra security can help encourage all parties to meet their shared financial goals.

Other joint savings accounts allow any of the account holders to access the money. These accounts can be convenient for financially responsible couples that trust one another implicitly. 

Can you direct deposit to a savings account?

Yes. You can make one off payments or set up regular direct deposits into a savings account. This can be organised easily through online banking or by making deposits in a branch. Talk to your lender to find out the easiest way for you to set up direct deposits.