Icesave £3 billion up, ING £3 billion down

According to recent reports the recently launched Icesave, which is part of Iceland's Landsbanki, has smashed through the £3 billion barrier, enjoying huge success since its launch in October of last year. With over eighty thousand savings accounts opened with the online savings operator, it has managed to take in over £3 billion in deposits in a short space of time. Icesave has offered savers interest rates of nearly six percent, which has attracted savers and added to the operation's success story.

Another attractions for customers is that Icesave has promised that until at least 2009 the AER on its savings accounts will exceed the Bank of England rate by a minimum of 0.25%. One official from Icesave stated: 'In achieving this new milestone of £3bn in total deposits, Icesave has shown Landsbanki's ability to diversify its balance sheet and develop its proposition in the UK market place.'

The Dutch bank, ING, on the other hand has seen things swing in the opposite direction, with angry customers pulling £3 billion worth of savings from the bank because of its failure to pass rising interest rates on to savers. The bank has admitted that a number of customers have withdrawn large balances from the bank in order to look for better interest rates elsewhere. The interest rate on ING Direct savings accounts seems to have stuck at 4.75 percent.

An official from ING Direct stated: 'The vast majority of customers are still with ING but those customers with higher balances who are rate conscious are people who are constantly looking for best rates in the market. Are there better rates out there? Yes there are. Do those companies pay all their customers the same rate? No they do not. We are trying to be consistently fair with all our customers so 5% is the highest and the lowest interest rate they will receive.'