ING to introduce stepped rates structure for Savings Accelerator

ING will replace the Savings Accelerator savings account's current tiered interest system with a stepped interest structure from 1 May 2026.

Under the current system, the variable interest rate that applies to a customer’s entire balance depends on which bracket it's total falls into. 

From 27 March, balances of between:

• $0 and $49,999.99 will earn 2.75% p.a.,
• $50,000-$149,999.99 will earn 3.65% p.a.,
• Balances above $150,000 will earn 4.60% p.a.

Those rates apply to the full balance, as long as the total balance surpasses the minimum requirement. 

Under that model, higher interest rates are available on higher account balances, meaning those holding $150,001 in a Savings Accelerator account may earn around $6,900 per year in interest while those holding a balance of $149,999 could receive just $5,475 per year.

Once upcoming changes take effect in May, the structure will change to four stepped tiers: 

1. $0-$250,000 at 4.60% p.a.
2. $250,000.01-$500,000 at 4.60% p.a.
3. $500,000.01-$2,000,000 at 4.60% p.a.
4. $2,000,000.01-$5,000,000 at 2.50% p.a.

“This means if your balance falls across more than one tier, each portion of your balance will earn the rate for its tier instead of one single rate across your whole balance,” ING said in its notice to customers. 

ING also notes these new rates may change by the effective date of 1 May. 

How does ING stepped interest structure work?

If you’re a Savings Accelerator saver with a $100,000 balance, you will earn the Tier 1 rate only. 

If you have a $550,000 balance, the Tier 1 rate will only apply to the first $250,000, and Tier 2 on the next $250,000, and remaining $50,000 will attract the Tier 3 rate. 

“More than one rate applies because the account balance falls into multiple balance tiers,” ING explained. 

Say, you have $2,100,000 in your account, interest earnings on that balance will look like this from 1 May:

• Tier 1 on the first $250,000
• Tier 2 on the next $250,000
• Tier 3 on the next $1,500,000
• Tier 4 on the remaining $100,000

Or in short, at the rates advised in the change notice, the first $2 million will earn 4.60% p.a. and the remaining $100,000 just 2.50% p.a.

High balance savers get the short end of the stick

With these upcoming updates, everyday savers with balances under $250k could see a significant boost, from 2.75% and 3.65% to 4.60% p.a.

However, customers with balances above $2 million may face a sharp drop as the top tier falls into 2.50% p.a., well below the current 4.60% p.a. applied across balances $150k and above. 

This change translates to a $2,100 reduction in interest earnings per year for a customer with a $2.1 million balance.  

But again, ING warns that the new variable rates may still change before the 1 May rollout, with final rates to be confirmed via the bank’s app, online banking, and website on the effective date.