Better interest rates
Right now, we’re parking our emergency fund in our ING Direct savings account. I was bummed to find out that the interest rate went down yesterday from 3.4 percent to3.. You’ll have that, in a down economy.
When the economy makes an upswing, interest rates will, too.
Already this month, we’ve earned $1.60+ in interest. Once we hit our fully funded emergency savings of $10,800 (watch it grow on the graph to the left!) we can expect to earn almost $30 per month in interest at current rates!
Compare that to about $3.60 per month in interest it would earn in a savings account of .4 percent at our brick & mortar bank. No thanks!
Some online-only banks might offer a slightly higher interest rate, but ING Direct is quite competitive, and for me, it’s not worth it to switch banks over half a percent or so.
Ability to save for different goals
You can easily create subaccounts within your savings account to stash away money for other goals. For example, we have an “emergency savings” account, but we also have a “Shane’s laptop” account for when we’ll have to replace it.
You can have a subaccount for Christmas gifts, clothes, vacations—whatever you want. And, you can automatically deposit money into those accounts.
Check out PaidTwice’s post for more details on how to set up subaccounts.
We have an ING Direct checking account and we each have a debit card that draws from that account. If we need to send paper checks to places, such as our landlord or cable company, we can set that up.
If we wanted to send a check to an individual (maybe a birthday present?) we could do that as well.
Or, we can go totally paperless and do online bill payments using our routing numbers.
If you already have an account with ING Direct, you know the hoops you have to jump through to create an account or even simply login. These are good things.
Some people are worried that an online-only bank isn’t as secure as a brick & mortar branch. Wrong! ING Direct is FDIC insured. They take account security very seriously.
Check out this post at Christian Personal Finance to learn more.
If you want to buy a CD, you can click a few buttons and set that up.
We haven’t yet invested in a CD, but we likely will set up a CD ladder of some sort once our emergency fund is in place.
If you’re interested in opening an ING Direct account, will you let me send you a referral sign-up link? Send me an e-mail at sensetosave AT gmail dot com.
If you make an initial deposit of $250 or more, you can get an extra $25 deposited into your account, but only if you sign up from someone’s referral e-mail. The referrer will get $10.
Once you have an account, you’ll be able to refer people, too!
You have to have a checking account at another bank to open an account with ING Direct.
To access your money, you’ll have to use your debit card, send a check, or you’ll have to transfer it back to your brick & mortar bank. This can take several business days to process.
It’s wise to have some sort of back-up plan in place so that you can get some money ASAP, especially if you’re using your ING account as an emergency fund.
We’re making the move to using ING as our primary bank. We’re still making that transition, and we don’t want to be caught in money-transferring limbo when it comes to getting our bills paid on time and the direct deposit set up.
But for us, the extra bits of interest are worth it. And, if my husband’s paycheck is direct deposited into the account, we won’t have that lag of a few business days to access the money (as opposed to transferring it from our other bank into our ING account).
Do you use ING Direct? What has been your experience with the bank?