Mar 12 2008

Why we love using ING Direct

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.

Checking accounts

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.

Security

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.

CD investments

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.

Referral bonuses

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!

Last tidbits

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?



27 Responses to “Why we love using ING Direct”

  1. Hi,

    My husband and I are planning to open an ING Direct account this Friday. Would you send me a referral?

    Thanks!
    Laura

  2. I LOVE ING.

    I also used to love how that had the “overage” bit with the Electric Orange accounts…ours had been $250 until they decided to check our credit reports and they knocked it down to $25.

    Even though the interest rates keep dropping, we’re still getting way more than we would with ANY bank around here! I just wish I had direct deposit at my job, because then I’d be able to get rid of one of our checking accounts!

  3. Sure thing! I just sent it. The referral link is for the savings account, but if you’d prefer the checking account referral link, let me know and I can send that to you.

    Thanks for letting me be your referral!

  4. We have both an Electric Orange and an ING savings account, and we’re big fans as well. We have had 2 cases of fraud with our account, and both have been handled very quickly.We have the Electric Orange account so that we have a debit card where we can access our emergency fund quickly if we’re dealing with a REAL emergency, rather than one that can wait a couple days to transfer money between banks. The transfer between ING savings & checking is pretty much immediate.

  5. I love ING, too. There never used to be that requirement of depositing the $250 before getting that $25. =(
    I still have some invites left if only I can find people that have $250 to deposit! =)
    I use it for my emergency fund, too!
    I’ve been meaning to post about ING also, but just haven’t gotten around to it. I’ve been so busy.
    Everything you wrote about is the same thing talked about in Mary Hunt’s Debt Proof Living book. I highly recommend that book if you haven’t read it yet.

  6. I have used ING for a few years and it is my main bank. I actually only have a Chase account because they gave me money to open the account, and one other bank because I need to get quarters for laundry and deposit cash that I get from some people sometimes.

    All my bills are paid via credit card and then the amount comes from my Electric Orange to pay the card when possible. For the few things that do not allow credit card payments I have Electric Checks set up to pay bills monthly.

    I love ING and I am not rate chasing with all the other places because ING is still higher than what I would get with Wells Fargo any day!!!

  7. I’ve been thinking about an ING account for a while, so I’ll take a referral! Thanks.

  8. I opened an INGDirect savings account and quite enjoyed it until their rates started plummeting faster than everyone else’s. I felt they were getting a bit cocky that everyone liked them so much that they wouldn’t switch. So I got an EmigrantDirect account and transferred most of my money to that. I like Emigrant fine, too (no $25 bonus, though, and they’re not much higher right now anyway–just 0.2%). Then I moved some of my money to a one-year CD at my local credit union. That wasn’t all that much higher at the time (0.8%), but the difference is getting higher all the time (now 1.1%).

    I also keep $500 in my local savings account, which I can transfer to my local checking account instantly (if I have an internet connection or am at a branch or ATM).

    I do highly recommend ING over local savings accounts for money you can wait a few days on. Some emergencies can be charged to a credit card, giving you plenty of time to transfer the money to the local savings account before the credit card payment is due.

  9. Hi Minnemom-

    I just sent it! Thanks!

  10. That’s a good point. You can definitely use your credit card in a crazy emergency, and then transfer the funds from your emergency account to your credit card bill before the bill comes.

  11. I have been doing research searching for the BAD things people say about ING. There is quite a bit out there, but only dealing with the immediate (and no warning) closing of accounts because a person withdrew more than ING wanted them too. I also read one account of a man who had about $1000 and just left his account alone (never depositing) in order to gain the interest. The closed his account shortly after that and sent him a letter saying that ING was not serving him, so they closed his account. One had been saving for home repairs, and when she got enough, she pulled out to make the repairs and again her accounts were closed without warning (making some of her checks bounce).

    Do you make a lot of withdrawls? Are you putting in MUCH more than you are taking out (or about the same amount)? I am VERY curious to hear from someone actually using their account like their bank. Putting money in and taking money out, and doing a fair amount of both.

  12. Yikes, that’s scary. Do you have any links?

  13. We use ING for CD’s for our kids and have had no problems, I’d love to see the links though for the cons of ING.

  14. I’ve been thinking about opening a savings account with them! I’ll take a referral. Thanks!

  15. So far I’ve had great experiences with them. We did have a problem with a CD being closed because we didn’t verify our address (because I’d accidentally entered my parents’ address so the letter went there). But we got that straightened out.

  16. Be careful when you say FDIC insured. It is not a claim that the bank is really “safer” than other banks. It simply means that, in the case of a very specific situation (such as the bank runs during the great depression), the government will jump in and protect the banks from going bankrupt because banks ALWAYS loan out more money than they actually have (dangerous, used to be illegal, but now legal in the US).

    So, even ING Direct can decide one day, to take your money and run. If they go out of the country, you will almost definitely never get your money back.

    Of course, this doesn’t mean ING Direct can’t be trusted. I actually use them because they SEEM legit. But I don’t put more than 20% of my savings into one specific bank. Remember, don’t put all your eggs in one basket.

  17. Folks need to read paperwork ING sends, as well as online information. The savings accounts are in reality money market accounts (hence the higher interest than your run of the mill bank). By law you are limited to six total withdrawals per month. I forgot once, but all they did was send a reminder not to do it again.
    Generally, I find they are the easiest of several online banks to deal with. Everything is clearly and instantly posted, it downloads easily, adding funding accounts, transfering money, the whole package is really easy to do. They also have the quickest turn around/tranfer time. I have also found their customer service to be excellent, and speedy as well.
    I use ING as my main bank, with my land locked account simply being a temporary holding area.
    Excellent resource!

    Thanks for starting this discussion!

  18. Have you considered putting your money into a money market at a credit union? I put our $1000 emergency fund into our regular savings account. We’re still working on the next step (3-6 months living expenses) and we have it in a money market, which is at around 3.9%.

  19. That’s a great rate! And, a good suggestion.

    We looked into joining credit unions in my city, but we haven’t found any that we are eligible to join.

    Our brick & mortar bank offers money market accounts, but the interest rates are low. Right now, it would be about 1 to 1.2 percent interest.

  20. Jay: A Money Market Account (MMA) is the same as a Savings Account. All savings accounts/MMAs are limited to six withdrawals per month.

    A money market *fund* (MMF) is a different type of account that usually combines the features of savings and checking accounts and garners higher interest (usually even higher than ING Direct, HSBC Direct, etc., which are savings accounts, also known as MMAs).

  21. Also: Money market funds are not insured by the FDIC and get higher rates by investing in short term bonds, usually. Still, MMFs are about as liquid as MMAs/SAs.

  22. We use our ING account very actively and have had no problems. I have heard that one way the online banks are able to offer such high interest rates is due not only to not having any brick-and-mortar locations, but also by having minimal customer service. I have read articles about customers who have been dropped because they were too “needy”- and this is the reason I don’t recommend an online bank to my parents. The online bank wouldn’t hold their hand through simple tasks. As it is, the few times we have had to call customer support, they’ve been very helpful.

    From BusinessWeek http://www.businessweek.com/magazine/content/05_11/b3924101_mz020.htm :

    Q: Is it true that you’ll actually drop customers that require too much hand-holding?
    A: We’re trying to keep costs down and offer a very simple service that appeals to customers who are self-service-oriented. Sometimes customers are used to branches, have high expectations, or require a lot of advice, so they really don’t fit in. We’ve talked before about firing customers, but really we just explain what we do and make sure it fits into the way customers like to operate.

  23. Thanks for the link!! I love ING for most of the same reasons that you do as well, my wife says I should go work for them!!

  24. Hey, I just found your blog. Looks great. The only negative is that it looks so girly. The guys will make fun of me if I am reading it at work during lunch hour. But still, it’s a good-looking blog.

    I LOVE ING. I opened an account last month for the sole purpose of holding my beginner’s emergency fund (only $1000 at this point). I’m also using it to save Christmas money and eventually car money.

    I opened a checking account w/ them, too, with the debit card. The one thing I wonder about is if I see a car for several thousand dollars that I end up wanting to pounce on, I would like to show and pay cash (for the best deal). But ING Direct will only let me take out $1000/day from the ATM, so it would take me a while to have the cash I need.

    Any ideas for this potential problem?

    Thanks again for the blog.

  25. Lol–my blog used to be WAY more pink. It almost hurt the eyes, it was so pink. I might be toning it back, or even changing the color scheme in the future.

    Thanks for reading my blog, by the way!

    It does stink that to get large sums of money from your ING account, you do have to wait a few business days.

    I’m not sure if a personal check would hold as much bargaining power, but you could send them an electronic check.

    Or…if you’re probably going to buy a car any day now, transfer the funds to your brick & mortar bank so you can withdraw the funds in person.

    You’ll only miss out on a few bucks worth of interest if you take it out of your ING account sooner…and you’ll probably save more than that when you pay cash for a car anyway.

    Good luck!

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  2. Around the PF Blogosphere: March 13, 2008 | The Suns Financial Diary | A Personal Finance Blog on Saving and Investing
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Hey! I'm Kacie, wife to Shane and mother to Jonathan (7), Vivienne (5) and Amelia (2) . I write about my family's finance: how we save money, improve our spending, and plan for the future.

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