ING Direct Review – High Interest Online Checking & Savings Accounts

After the failures of numerous financial institutions and the ensuing aftermath and loss of confidence in traditional companies, many individuals and families have sought out – and found – new, reliable banks. Direct online banks are growing in popularity because they provide traditional banking services at lower prices.

ING Direct, the largest FDIC-insured direct bank in the United States, offers a vast array of financial products. Your options with ING Direct include: checking and savings accounts, certificates of deposit, home loans, investments, retirement services, and business services.

All of these services are available online, by phone, and through the mail. Direct banks have lower operating costs than traditional brick-and-mortar institutions, and they’re often able to pass these savings along to their customers.

Advantages of ING Direct

1. High Interest Rates

One of ING Direct’s biggest advantages is that they offer higher rates of return on your money. As you know, most major banks are currently paying out minimal interest on savings accounts with rates still below 0.20%. But the ING Direct Orange Savings Account comes with a 0.75% APY.

As a comparison, if you place $1,000 in a traditional bank’s savings account, you’d earn about $2 in interest assuming simple interest. On the other hand, the same $1,000 placed in an ING Direct Orange Savings Account would earn you $10. ING Direct’s checking accounts and certificates of deposits also pay much higher rates than their banking counterparts.

Moreover, the checking account offers a minimum of 0.20% up to 0.85% depending on your account balance. These rates are significant, especially considering that most banks do not offer any rate of return on checking accounts.

2. No Fees and No Account Minimums

While most financial institutions are “feeing” their customers to death by charging them for everything, ING Direct charges no fees whatsoever on its Orange Savings Account. The Electric Orange Checking Account also has no monthly maintenance fees, nor does it come with a minimum balance requirement. Even the Easy Orange Home Loan has no application fee and charges no points to home loan applicants. ING Direct has no minimum deposit requirement to open an Orange CD either – you could open a CD with just $1 if you really wanted to.

3. Online Bill Pay

ING Direct’s free Online Bill Pay service allows you to link your account to pay any necessary bills such as credit cards and utilities. It is a straightforward process, and it guarantees that your payment will arrive before the deadline.

4. Itemized Sub-accounts:

ING sub-accounts are essentially itemized savings accounts that allow you to specify separate accounts for separate savings goals. By doing so, these accounts allow consumers to clearly organize their short and long-term savings goals and closely monitor their progress. Some examples of sub-accounts include an emergency fund, new car fund, vacation fund, shopping fund, and home improvement fund. The accounts all fall under your main savings account, and there is no limit to how many you can open.

5. ING Direct Electric Orange Debit Card:

ING offers a MasterCard debit card to complement your checking and savings accounts. There are no associated monthly fees, minimum balance requirements, and most impressively, no overdraft fees.

6. Quick and Easy Services

Opening an ING Direct account is quick and simple, and you can open any of the different types in under five minutes. All you need is a current bank account to use for a transfer. ING Direct also makes it easy to open an IRA retirement account through ShareBuilder. And even though most people think of ING as “the online bank,” they have representatives available for customer support by phone, and in person at limited locations (i.e. ING Direct cafés).

7. Online Checking Made Easy

Writing online checks with ING Direct is easier and more convenient than paper check writing, and their system makes it easier than most traditional banks’ websites do. Instead of carrying checks with you all the time, just fill out the “Mail a Check” form under the “Make Payments” section of your account. ING Direct will mail the check for free on your behalf and will also add the address to your address book for easy access in the future.

The online check system allows you to set automated checks ahead of time in case you need to send checks to a person, company, or organization on a consistent basis. I have set this up for my natural gas bill, for example, and I’ve been amazed by the work that ING Direct does for me. Their system receives a copy of my regular bills, identifies the amount due, pays the bill, and emails me a confirmation of payment – all automatically.

8. Electronic Transfers

As if easy transfers and online check processing weren’t good enough on their own, ING Direct takes it a step further and combines the two concepts. They now give you the option to enter a friend or family member’s checking account information to process an electronic payment – saving paper and getting the money to the other person more quickly.

You just need to get the recipients’ routing and account numbers, which of course, might scare some people. Although you may initially be wary of giving out account numbers, it’s information that’s on the checks you write, so I advise trying it out for quick, painless payments. Identity thieves would need a lot more information to hack your account or maliciously use your data.

It is also extremely easy to transfer funds between your savings and checking accounts, including from your sub-savings accounts.

9. Mobile Options

The check writing and bill pay options are also available from an iPhone, Blackberry, or other mobile device with the new ING Direct mobile phone app. The app allows you to check your bill pay set up and send online checks, but currently only to friends already included in your ING Direct address book.

Disadvantages of ING Direct

1. Downside of Online Checks

Although the check writing process is free and easy, I have experienced some disadvantages that may limit my use of the service. The main complaint is that it takes a relatively long time for ING Direct to write and send the checks. In fact, I have had numerous people tell me that it took over two weeks from the time I entered the payment in ING’s system until they received the check.

Alternatively, when you mail a check yourself, you can usually trust that it won’t take more than a week to arrive in the other person’s mailbox. If a friend or associate is urgently waiting for your payment – or if you’re cutting it close on a bill payment – I advise writing a paper check or using the electronic transfer option.

2. Mandatory Checking Account

You must have a linked checking account at another financial institution to open an Orange Savings or Electric Orange Checking Account. This can be an inconvenience if you would only like to have one checking account.

3. No Cashier’s Checks

Further, ING Direct can’t send cashier’s checks because of its decision to go with a more secure, paperless system. This lack of paper can sometimes causes problems. For example, in one situation when I needed to make a payment on the spot, I was unable to come up with a check; ING reminded me of their standard recommendation about keeping a checking account at a brick-and-mortar establishment close to your home as a backup or alternate account. It’s not too much of a hassle to have two accounts, but it means that ING Direct can’t yet serve as a full substitute of your typical bank. Instead, it’s a great complementary option.

4. Difficulties Depositing

Unless you set up direct deposit, you have to mail deposits to ING Direct or transfer them from another checking account. This of course isn’t a problem if your employer offers direct deposit or if you’re pretty comfortable with electronic transfers (they’re pretty simple, even if you’ve never done them before). But if you frequently receive conventional checks, you will have to rely on the speed of snail mail. However, ING does provide you with the necessary envelopes and stamps to make these deposits.

5. Availability of Funds

Funds you deposit will become available a little more slowly than they would at a traditional bank. You can schedule transfers for any business day, but it can take up to 48 hours for ING to complete the transaction. You’ll also have to deal with a two-day hold on account deposits. On the first business day, you’ll have $100 available, and the full amount will show up on the second business day.

Getting Started with ING Direct

$50 Bonus for Opening an Electric Orange Checking Account

ING Direct is offering a $50 bonus for new Electric Orange Checking Account customers who make at least three signature-based debit card purchases in 45 days. You can qualify for the bonus even if you already have their high yield savings account.

Final Word

Direct online banking has many benefits over traditional banking, and ING Direct is one of the industry leaders. With its many products and services, ING is a strong option if you decide that direct banking is right for you. I’ve been very pleased with many of the services, especially the savings account, CD, and investing services. At the very least, an ING Direct bank account is a great complement to your regular bank account.

Do you hold an account with ING Direct or another direct bank? What advantages have you seen, and what are some of your greatest concerns?