A slap in the face for loyal customers

Can you put a price on loyalty? Well, it would be about -2% if you are a long-term saver with ING. Those who had their money in Icelandic bank Kaupthing and had it transferred to Dutch bank ING last year are now being given the chance to earn 4% on their savings (see page 14), while new customers are also being tempted in with a rate of 3.5%. Existing customers are getting 1.98%.

You can understand ING’s strategy. The bank has gained 160,000 customers from Kaupthing and these customers are likely to be “rate tarts”, chasers of the best return. ING needs to offer them a bribe to stay. But it’s not a new tactic for ING. For the past year, the bank has been offering new customers a sweetener headline rate, changing it almost monthly, while leaving its existing savers languishing on a much lower rate. In December last year, for example, existing customers found themselves on rates of 2.72%, while new customers were being offered 4.89%.

From The Guardian