Review Of ING Direct Savings and Electric Orange Checking Accounts

Published 1/20/09 (Modified 3/22/11)
By MoneyBlueBook

Back in the pre-Internet caveman days, the very concept of a high interest savings account consisted of a bank deposit at your local neighborhood banking branch that offered an underwhelming .50% interest rate on deposits (merely half of a single percentage point). For most aggressive savers at the time, the only practical way of achieving a high annual percentage yield (APY) on bank deposits was to seek out the best CD rates by setting up a certificate of deposit account. However, given the less liquid nature of CDs compared to savings accounts, and the greater complexity with CD management and rollovers upon expiration, most bank consumers ended up accepting the low APY rates of the day. But with the emergence of the Internet and the World Wide Web came a new innovation with the force to change the financial landscape forever - online banking. With the rapid ascension and development of online banking came the emergence of online-only savings and money market accounts. With the ability to tap into substantially lower overhead costs, and the ability to eliminate the need to operate expensive bank branches or pay live tellers to manage them, online banks quickly surpassed traditional retail banks in what they could offer consumers in the way of improved 24/7 on-demand services and higher rate offers for bank deposits.

ING Direct - Leader Of The Early High Yield Savings Account Movement

One of the very first Internet based financial services firm to enter the U.S. virtual banking market was actually a large Dutch bank based in Amsterdam, Netherlands called Internationale Nederlanden Groep. Today, most of us know the company simply as ING or ING Direct. Arriving onto the scene in 2000 during a time when Internet banking was still a new and developing concept, the branch-less direct bank ING Direct quickly set the stage as the premier trailblazer in a new line of heavily marketed high yield savings accounts. With its aggressive high interest rate promotions and slick marketing ads that enabled the ING Direct brand to go viral with great appeal to early adopters, the company quickly captured a large piece of the online banking pie with its colorfully named Orange Savings Accounts, and cemented itself as the granddaddy of all online savings accounts. With its slick marketing approach and prominent display of the ING Direct trademark orange ball in its advertising, to this day the company continues to successfully draw in new customers seeking the perfect balance of CD-like high interest yields, with the liquidity benefits of ordinary saving accounts.

In step with its innovative online beginnings and willingness to experiment with better ways of providing banking services, ING Direct has even opened up a few ING Direct Cafe chains in the six major cities of Chicago-Illinois, Philadelphia-PA, Los Angeles-CA, New York City-NY, St. Cloud-Minnesota, and Wilmington-Delaware, each serving a unique menu of coffee drinks. Inside each of these novel ING Direct Cafes are internet computer workstations that allow patrons to enjoy freshly brewed coffee while banking online and surfing the web free of charge. The ING Direct Cafes even occasionally feature live seminars on various financial and investment topics such as retirement portfolio management, credit and debt reduction, and home mortgage loan refinancing. While the company has had its share of ups and downs over the years, including a particularly bumping integration phase involving failed virtual bank NetBank, which ING acquired in 2007, the company has managed to stay on track as an oldie but goodie in the ever advancing world of new and better high yield savings accounts.

Why Choose ING Direct Over Other High Interest Checking Or High Yield Savings Accounts?

I've had ING Direct as one of my best online banks for many years now. As an aggressive bank rate chaser and someone who has a fairly substantial amount of cash deposited into safe and secure FDIC insured bank accounts, I utilize a strategic number of top rate bank accounts (ING Direct being one of the more prominent ones) to keep myself well under the FDIC insurance coverage limits while earning a good return. While ING Direct's interest rates have ebbed and flowed over the years and its current rates may not be the absolute highest available, I still like and appreciate the popular online bank's historical consistency in terms of simplistic features, ample customer support, and lack of any fees or hidden costs.

1) ING Direct Online Accounts Are Uniquely Easy To Use and Manage

Logging into my ING Direct online account, it's clear the bank was meant for those consumers who wanted a simple, self run high interest deposit account without the hassles or complexities of full service accounts burgeoning with all sorts of unnecessary bells and whistles. The ING Direct account web interface is extremely bare bones and easy to navigate. Take the ING Direct Orange Savings Account for example - after logging into your secure account, you are immediately plainly presented with all the important bank account information you really need - your precise current annual percentage yield (your interest rate), your transaction history and current balance, and a easy to read ongoing tally of the cumulative interest income you've earned this month thus far. Furthermore, all of your balances and transactions can be easily downloaded into free Quicken Online, desktop Quicken, or Microsoft Money to help you better track and manage your cash flow habits. Few other online banks offer such simplistic perfection in terms of account interface for the novice and entry level online banker.

2) Ability To Rename Accounts and Set Up Sub-Accounts For Targeted Savings Goals

ING Direct offers a few unique account perks not found in other online banks - one of them being the ability to readily denote and create custom nicknames for individual accounts. The other unique function is the ability to create sub accounts under your primary ING Direct account.

In my case, having a unique readable name for each ING Direct account helps me identify and chart out savings goals via automatic savings plans. Under my primary Orange Savings account with ING Direct, I can create a sub-account named "Emergency Fund" or perhaps another one tagged with the name "Future Plasma TV". Certainly having actual names for individual accounts means more to most people than simply "account number: #A1234567", and encourages active saving and better planning. While the new sub bank accounts that you create are regarded as separate savings accounts along with your primary account, because they are all tied to your single customer ID number, they appear viewable as a list on your primary ING Direct account page. Having your savings accounts broken down into listed chunks with custom tags like "Christmas Shopping", "New Dining Table", or "Trip to Paris" can greatly help you achieve your targeted savings goals and better manage your money. Best of all, as you save, your money enjoys the quiet benefit of a reasonably high APY interest rate of return.

3) Setting Up An ING Direct CD Ladder Is Very Easy

When it comes to opening a certificate of deposit and setting up a CD ladder to maximize liquidity and CD interest rate of return, ING Direct really shines in this department as it makes the process effortless and straightforward. Once you have your basic ING Direct savings or checking account set up, with just a few keystrokes online, an ING Direct CD ladder can be created easily by selecting the monetary amounts and time period maturities desired.

4) Absolutely No Fees, Maintenance Charges, Account Minimums, Or Inactivity Charges

One of the best features of ING Direct is the fact that there are absolutely no fees, no minimums, and no hidden charges. With other high interest savings accounts, the same cannot be said as some banks have a knack for imposing a tiered interest rate system - offering a lucrative high rate for those with a significant amount of money deposited into a savings account and a much lower rate for those with smaller, modest amounts. With ING Direct, there are no tiered interest rates as everyone enjoys the same equal rate on all deposits at all levels. As indicated on its website, all account holders earn the same high interest rate regardless of their account balance, and no one pays a fee. Thus, you can open your new ING Direct checking or savings account with as little as a single dollar and still enjoy ING Direct's highest variable APY interest offer.

5) Ability To Earn Extra Money and Referral Income By Referring Friends

Unless you own your own website and run an affiliate publisher business, usually there are very few ways for ordinary bank account customers to earn some extra money on the side by referring new customers (other than the occasional free iPod type promotion). However, ING Direct is an exception and actually provides monetary cash incentives to encourage new customer referrals. Under the ING Direct referral bonus payment plan, the bank will pay existing customers $10 for every new Orange Savings account or Electric Orange checking account customer they recruit. As a promotional incentive, it's also not just the referring account holder that benefits. All newly recruited customers who open a new ING Direct account utilizing the referral link within the email message generated by the referring customer will also earn a nice $25 welcome bonus deposit as well. Currently the maximum ING Direct referral bonus amount you can earn is $500 due to the referral limits of 25 new Orange Savings accounts and 25 Electric Orange Checking accounts, at $10 each.

6) Enjoy A Competitive Interest Rate On ING Direct Electric Orange Checking and Orange Savings Accounts

The crux of ING Direct's offerings is comprised of its two primary interest bearing bank accounts:

The ING Direct Orange Savings account features no opening requirements, no account fees, no minimums, and the bonus benefit of a competitively high APY interest rate.

The ING Direct Electric Orange Checking account features high interest checking and free bill pay features. With free bill pay, you can send electronic or paper checks to any individual or company as payment for free. I utilize free online bill pay to automatically pay my monthly rent without having to go through the hassle of licking stamps and remembering to send checks out every month. Access to your Electric Orange checking account funds can be made via the web or with your free ING Direct debit card at any checkout register and at any one of the free ATM machines that comprise the ING Direct ATM network.

While currently ING Direct does not offer the absolute highest variable interest rate for its account deposits, it offers an established history of rates that are at least competitive with what's offered in the market place, frequently and reliably beating out the pitifully low rates offered by major brick and mortar banking giants like Citibank, Bank of America, and Wells Fargo. Particularly when it comes to interest checking accounts, those desiring something better than a negligible rate should look into an Electric Orange Checking account as an option. Not only can you earn a decent interest return on your idle checking balance with ING, you also get to enjoy free checking account benefits such as free bill pay, free electronic checks, and even free paper checks. If you're paying for those services at your current bank, you may be wasting your money.

7) ING Direct Bank Safety, Reliability, and Security With Full FDIC Insurance Up To $250,000

As with all FDIC member banks, all checking, savings, and CD deposit accounts are fully protected up to the current full FDIC coverage limit of $250,000, backed by the full faith and credit of the United States government. This type of iron-clad guarantee essentially renders all FDIC insured accounts immune from bank failure or any type of catastrophic financial loss. While there are ways to maximize the FDIC insurance limits beyond $250,000 with joint accounts, as a general rule of thumb, so long as your total individual deposits at ING Direct remain under that amount, you are fully protected against loss. Rest easy.

8) While Remarkably Simplistic, ING Direct Still Offers A Wealth Of Bank and Brokerage Services

While ING Direct's bread and butter is the Electric Orange Checking account and the Orange Savings account, ING also offers a reasonable wealth of other full service banking amenities:

• Savings (Orange Savings)
• Checking (Electric Orange)
• Certificates of Deposits (Orange Certificate of Deposit)
• Home Mortgage Loans (ING Direct Orange Mortgage)
• Home Equity Line of Credit (Orange Home Equity)
• Stock and Mutual Fund Investing (ING Direct ShareBuilder - one of the best brokers) - features no account minimums and is currently offering a free $50 bonus on new accounts.
• Business Accounts (Business Savings, Business CDs)

When it comes to ING Direct's online customer service, while not particularly exemplary, the customer service support has generally been on par with that of other online banks. In my experience, ING Direct agents have always responded fairly timely whenever I had a question or pressing technical issue.

9) Opening A New ING Direct Account Online Is Quick And Automated

Those accustomed to the speed and web-only nature of opening up new online bank accounts will find ING Direct to be no different. As the entire application process is conducted via the ING Direct homepage, there is no cumbersome paper work involved, unless you choose to link your funding checking account with your new ING Direct account using a paper check. Otherwise, the entire online driven application process should literally take less than 10 minutes of your time.

As the instruction states, after providing the customary personal information (name, address, social security number) and agreeing to the standard terms and conditions, you will need to complete the process by making an electronic deposit from your existing checking account. But before your new ING Direct savings or ING Direct checking can be funded and electronically linked up to your existing bank account, you will need to verify ownership through a one time deposit test. After submitting your ING Direct application for approval, the system will automatically request that you verify the amounts of two deposits, each less than $1.00 that ING Direct will temporarily deposit into your funding bank account. The deposit itself usually takes 1-3 days to be made but once that happens, you can complete the link verification and finalize the account setup. While you can choose to fund your new account with a paper check, I highly recommend learning to set up online ACH electronic transfer for quick future bank fund transfers. After all, online banking is all about efficiency, speed, and the quest to do away with paper transactions completely.

Extra Information and Resource:

• ING Direct ABA/Routing Number for direct deposits and ACH transfers: 031176110