Birmingham Midshires has launched a new direct savings account with a rate of 4.75 per cent, looking to challenge the likes of ING.
The account has been launched with the promise that it will pay 0.25 per cent more than the popular ING Direct Savings account until 1 August 2008.
But Moneyfacts.co.uk warns that conditions in the small print may not provide customers with as good a deal as they would have hoped.
Moneyfacts.co.uk head of news and press Andrew Haggar says: “The link to an established and extremely popular account such as ING is an interesting marketing approach, and although Birmingham Midshires will undoubtedly woo savers currently receiving a much poorer rate of return, I’m not sure how many people will defect from ING. Whilst the interest rate is a quarter of a point higher than ING, in monetary terms this means an additional £12.50 worth of interest gross in a year for somebody with a £5,000 credit balance.
“This said, it is certainly refreshing to see another player in the savings market introducing a ‘no strings’ account paying a decent rate of return, rather than launching an account offering a seemingly high rate of interest, but only to disappoint consumers when they discover prohibitive conditions hidden in the small print.”