ING customers lower interest rates transfer to Barclays

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More than one million savers with ING Direct will start to receive letters this week telling them they are no longer its customers.

The Dutch-owned bank has sold its savings and mortgage business to Barclays, and the ING Direct brand name will now disappear.

Customers who had savings with the overseas bank now belong to Barclays Direct after the deal was finally completed last week.

Transfer: Savers with ING Direct will see their accounts transfer to Barclays following a buyout.

There are no immediate changes to the way customers' accounts will operate following the deal.

Over the next few months, Barclays will transfer ING Direct savers into 'equivalent' Barclays accounts.

It has not yet revealed which accounts these will be, nor the rates it will pay, but admits there will be changes in how you access your account.

You need to watch your interest rate when your account switches over. ING Direct offered top rates to UK savers.

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Former ING customers who opened an account last summer are earning as much as 2.59 per cent after tax (3.24 per cent before).

But the rate will be cut to just 0.4 per cent (0.5 per cent) once you have been in the account for a year. However, even this is more than you can expect from Barclays.

The High Street bank's internet-based savings pays a miserly 0.08 per cent (0.1 per cent).

Barclays Everyday Saver pays 0.48 per cent (0.6 per cent) but this includes a 0.4 (0.5) percentage point bonus for the first year.

Savers with Barclays Direct are now covered by the UK compensation scheme rather than the Dutch one.