Sharp rise in online saving

The flow of funds into online savings accounts is rising rapidly, resulting in increased competition among providers. Customers can enjoy significantly higher interest rates than those offered through conventional savings accounts. For example, Community First Credit Union's Easy Street product now offers an interest rate of 5.45 per cent on balances of $1,000 or more; Citibank offers 5.4 per cent; ING Direct and Suncorp 5.25 per cent. Amongst the larger banks, St George is the only one to offer an online savings account option. ING Direct now has more than 600,000 account-holders or a 2 per cent share of the savings account market. Its online savings and term deposits total $11.4 billion.