ING Direct Bank - a review
Jan 21 '01 (Updated Mar 13 '08)
Pros:
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Cons:
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The Bottom Line If you want a high savings rate regardless of how much you have in account, ING Direct is one bank you should consider. No fees, no gimmicks.
Recommended:
Yes
This is a comprehensive review of ING Direct USA.
If you want a $25 referral to ING Direct, please scroll down to the bottom for my email.
ING Bank "ING Direct" is an FDIC insured Internet savings bank. ING Direct is the Internet arm of ING Group (International Netherlands Group) and has banks in Canada, France, Australia, Spain, Germany, Italy, UK, and USA; all separate entities from each other. ING Direct opened for business late 2000 in the USA.
ING Direct sometimes will have an account opening promotion, see below for more information.
ING Direct offers one type of savings account, and it is called Orange Savings. The account earns a competitive APY (see footnote 1 for rates) as compared to other Internet banks with no minimum to deposit, no tiered interest rates, and no fees associated with the savings account. Regardless of the balance you have in Orange Savings, it will be earning the same rate as everyone else. ING Direct also offers 1yr, 5yr CDs, plus loans and mortgages at competitive rates.
One reason why ING Direct can offer high interest rates, and no fees because they concentrate solely on savings and loans; and operate with low overhead, with most of their operations done over the Internet and by phone. ING Direct did open a few branches in select cities, but these are mainly internet cafe offering Peet's coffee, applications, and of course free computers that you can surf the Internet from as well as view your ING account, and transfer funds.
Personal Experience (see below for new updated info).
I opened an account with ING Direct early Dec 2000. At that time, ING Direct was new and untested in the USA, but I forged ahead anyway as it had a good track record in the other countries it operated in. I filled in the application online (paper applications are available also), and was given the choice of funding my account either by a direct link to my checking account, or funding by a check. Either way would link my ING account to my bricks-and-mortar checking account. I choose to send a check. Soon after opening an account, I was sent disclosure material, and the terms and conditions via mail.
I found security to be good. You set your pin number by dialing up customer service with either one of two toll-free numbers they have (see footnote 2). Once they verify your identify, you then set your personal 4 digit pin number. Once your pin number is set, you must wait 24 hours to have it set into the system. I tried logging in before 24 hours, but I was locked out after three bad login attempts. After calling customer service, I found out that they have a three bad logins, and you're locked out for 24 hours policy.
ING Direct customers, for the purposes of online and automated phone access, are assigned a client/customer number in addition to your bank account numbers (which are listed on your bank statement).
Once logged into the ING website, you can view your accounts; transfer money; view/change links to checking accounts you have at other banks; view pending transactions; view/change personal info such as address, and email; change PIN; or sign off. The online statement explains each transaction in one sentence. Paper statements are also sent every month there is activity on your account, and the statement lists your accounts and transactions in a straightforward manner. If you change your personal information, they will verify by sending two letters, one to your former address, and the other to the new one.
There are two ways to automatically transfer money into your account. One is to setup an "automatic savings plan" where money is transferred, on a regular basis, from your brick-n-mortar checking account to your account at ING Bank. The other method is to use Direct Deposit for third party checks (payroll, affiliate accounts, etc.) To set up an automatic savings plan, you go into your ING account, click on "my links" and follow instructions. To setup Direct Deposit, you go into your ING account, click on the savings account you want money deposited, then click on a link labeled "direct deposit". The form will contain ING Bank's ABA routing number (which is also listed in footnote 3 below.) You can also print the form and give to whoever handles your paychecks.
Limitations
The downside to ING Direct is that the only way to transfer money between ING and your bricks-and-mortar checking account is via ACH transfer. ACH is Automatic Clearing House, and it is how banks -- with the exception of Fed wire -- electronically transfer money to other banks. Paper checks are also cleared this way. It normally takes 2-3 days for money to be transferred and accounts settled. The new "Check 21" act of 2004 allows banks to cut down the processing time to mere hours, but for the consumer, it will still be 2 day wait for accounts to settle. Savings deposits are also subject to a 5-day business day hold before it can be transferred/withdrawn out.
Another downside is the Orange Savings account is for personal use only, and can be established either for one person "Individual", or two people "Joint account". The account cannot be used for business, as a pension, or have a power of attorney attached (beneficiaries). Revocable trust, Totten, "payable-on-death", or other trust accounts are also not offered. The Orange Savings account can, however, be used in an IRA if you want. http://home.ingdirect.com/secure/terms_only_popup.html
Another limitation is how ING Direct compounds interest on their certificates of deposit (CDs). While ING Direct now compounds interest on a monthly basis--it used to be compounded annually--it is still not the same as daily compound interest like how so many other banks do it. It's best if you do some compound interest calculations first, among other criteria on judging a bank, before committing your money for the long haul.
In early March 2001, ING Direct began building cafes in select cities. (see footnote 2 for locations). I walked into the one located in NYC where I lived to check it out. Surrounded by the many anonymous gray corporate structures of Park Avenue, this little cafe was eye catching with its bright orange paint and futuristic styled architecture. Inside they were serving Peet's coffee, and had Internet terminals that allowed you to check your accounts, and even surf the net while you sipped. It would have been a great place to put in an ATM machine, but unfortunately, ING Direct has no immediate plans to allow ATM access to funds.
For more information, visit http://www.ingdirect.com and click on FAQ.
Update 2002-2003 Opening an account, and website security. For your security, when you open a new account, ING Direct will verify your home checking account by depositing two small amounts into it. You are also now required to have a valid driver's license, or a state issued ID to verify your personal information. Website security has been increased requiring users to not only input their pin and acct number, but also answer a random security question only you know the answer to.
Update 2004 website security now includes Pin Guard, randomly generated letters based on your PIN, designed to foil keylogging.
Update 2006 ING Direct now has checking accounts, called Electric Orange, please refer to the ING Direct website for more details.
Info on the ING Direct $25.00 bonus for opening an account:
Ever since ING Direct opened for business, they have been offering some sort of incentive just for opening an account there. If you are looking to open an account at this bank, it is probably best if you get someone to refer you. The email containing the referral link is sent directly from ingdirect.com. Like everything on the Internet these days, due to scam/con artists, etc., always verify links in your emails before you click on them. Links should take you to ingdirect.com, and the http:// protocol should convert into https://
The $25 referral program details:
New customers receive $25.00 for opening, and funding an ING Direct savings account, while the referrer gets a $10.00 bounty. The welcome bonus is only available to new customers of ING Direct USA, and not for any other country ING Direct may operate in. Note: since October 13, 2005, ING now requires a minimum deposit of $250 in order to receive the $25 bonus.
All ING Direct account holders can refer up to 25 people. If they want, they can, since late 2004, chip in some of their own money to go along with the $25 referral.
If you want a referral to open an ING Direct checking or a savings account, please email me at
lucky_dog89 ---anti-spam barrier--- @yahoo.com
and I will send you one (please specify which one you want. [in the end it doesn't really matter which you open first as your ING Direct account can contain up to 3 accounts (whether you want just one savings account, or a combo of two savings accounts and one checking, etc.)
Footnote 1
Historic rates:
Orange Savings ----- 6.50% APY in Jan 2001. 4.75% APY in July 2001. 2.75% in August 2002. 2.30% in Mar 2003. 3.4% in Oct 2005.
1 Yr CD ----- 7.5% APY in Jan 2001. 4.40% APY in July 2001. 3.00% in August 2002. 2.30% in Mar 2003. 4.20% in Oct 2005.
5 Yr CD ----- 7.25% APY in Jan 2001. 5.75% APY in July 2001. 4.80% in August 2002. 3.75% in Mar 2003. 4.70% in Oct 2005.
Loans ----- 9.95% in Jan 2001. 8.20% in July 2001. 4.75% in August 2002. 4.25% in Mar 2003.
Visit www.ingdirect.com and click on "Products" for current rates.
Footnote 2
Customer service numbers:
New Products: 1.800.ING.DIREct
Service: 1.888.ING.0727
Interactive Phone Service: 1.888.ING.7868
On the web: http://www.ingdirect.com
Email: sales@ingdirect.com
Address: ING Direct
1 South Orange Street
Wilmington, DE 19801
ING Direct Cafes:
1) New York City: 45 E. 49th Street (west of Park Ave.)
2) Philadelphia: 17th and Walnut Street.
Footnote 3
additional info about ING Direct.
ING Bank was established as a savings bank August 2000. It is regulated by the Office of Thrift Supervision. The FDIC certificate number is 35489.
Current assets [in Dec 2002] are $11.9 billion (with $9.3 billion in deposits).
[in June 2005] they were $47.2 billion (with $34.9 billion in deposits).
http://www2.fdic.gov/idasp/confirmation.asp?inCert1=35489
OTS website: http://www.ots.treas.gov
FDIC website: http://www.fdic.gov
ING Direct Bank ABA routing number: 031176110
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If you want a referral to open an ING Direct account (you get $25 for opening an account with a minimum of $250 deposit) please email me at
lucky_dog89 ---anti-spam barrier--- @yahoo.com
and I will send you one. please specify whether you want the savings account referral, or the checking account referral. [in the end it doesn't really matter which you open first as your ING Direct account can contain up to 3 accounts (whether you want just one savings account, or a combo of two savings accounts and one checking, etc.)
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