ING Direct tweaks ATM deal

ING Direct has changed the terms of the ATM fee rebate offer for customers using its transaction account, Orange Everyday, in a bid to encourage greater use of the account.

When the bank made its entry into the transaction banking market in 2010 it offered an account with no account-keeping or transaction fees and an ATM rebate. As long as customers withdrew a minimum of A$200 their foreign ATM fees would be rebated (ING Direct has no ATMs of its own).

In a change announced on Friday, ING Direct has dropped the minimum withdrawal requirement and will rebate fees as long as customers deposit a minimum of $1000 into their account each month.

Over the past couple of years the bank's strategy has been to increase the number of customers who use ING Direct as their main financial institution. For most of its history in Australia the bank has relied on its high-interest online savings account and mortgage products to attract business.

Earlier this year, the bank's chief executive Vaughn Richtor told Banking Day that 200,000 of its 1.5 million customers had an Orange Everyday account - up 34 per cent in 2013. The bank uses Orange Everyday account relationships as an MFI indicator.

One potential problem with fee-free accounts is that consumers are happy to sign up for them because they cost nothing but then may not use them. The bank's change to its ATM rebate deal is designed to make sure customers are depositing money into their Orange Everyday accounts.

Reserve Bank figures show that ATM fees have been rising in recent years, while a number of other retail bank fees have been flat or falling.

ING Direct cited Galaxy research showing  ATM fees topped the list of fees customers disliked the most.