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ING Direct Cuts Interest Rate

Written by Nickel - 27 Comments

Just quick note to let everyone know that ING Direct has dropped the rate on the Orange Savings account to 4.30% APY. The driving force behind this decrease was the Federal Reserve’s decision to cut the federal funds rate by 0.50% earlier this week. While I would expect other banks to eventually follow suit, it’s important to remember that ING was already lagging behind the pack. Banks such as HSBC Direct, WT Direct, and Emigrant Direct pay substantially more and, even if they cut rates in the coming days/weeks, I would expect them to remain well ahead of ING Direct.

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Published on September 20th, 2007
Modified on July 23rd, 2008 - 27 Comments
Filed under: Banking, Online

About the author: Nickel is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

27 Responses to “ING Direct Cuts Interest Rate”

1
Adam Says:
September 20th, 2007 at 12:40 pm
people still use ING?
2
nickel Says:
September 20th, 2007 at 12:44 pm
I don’t but, believe it or not, some do…
3
Blaine Moore Says:
September 20th, 2007 at 2:02 pm
Well, at least I still have a lock on 5.25% through the end of the year with my local brick & mortar savings account!

After that, hopefully they do not drop too much, and if they do then hopefully HSBC does another “high rate on new money” promotion that I can transfer it all into.
4
dong Says:
September 20th, 2007 at 2:36 pm
Hey I still use ING, setting up a CD latter is so much easier than HSBC. Obviously the interest rate on the savings account isn’t great, but the CD rates are ok and dman easy to setup.
5
Mrs. Micah Says:
September 20th, 2007 at 2:43 pm
I got one of their CDs at 5.25%. I was thinking about them for my savings account, but now that they’ve dropped so low I’m going to probably drop them out of my list. I’m trying to find one with good interest and good online services.

I’ve been hearing a lot about Emigrant–any users willing to elaborate on banking with them?
6
Cheap Like Me Says:
September 20th, 2007 at 2:51 pm
Is there something wrong with ING (besides the fact that their rate is now lower)? Nickel, it looks like as of Aug. 31 you wrote that you still had kids’ funds there, but with the mockery I’m wondering if it’s unstable? I do agree that obviously, higher rates are better, especially as you accumulate funds – and HSBC has a lot of good word of mouth out there.
7
nickel Says:
September 20th, 2007 at 3:19 pm
Yes, I should clarify… We still have our kids allowance accounts there because: (1) it’s a small amount, so the rate doesn’t really matter, and (2) we were able to easily create subaccounts for each of them under one login.

But in terms of our ‘real’ savings, we don’t use them because of the less-than-competitive rate. As far as I know, they’re perfectly stable.
8
Tim Says:
September 20th, 2007 at 5:55 pm
yup, people still stay with ING…that’s how ING makes their money.

i’m still with igobanking 5.3%.

did ING lower its mortgage and HELOCs as quickly, too? hmmm.
9
Stephen Says:
September 20th, 2007 at 6:47 pm
I am in the process of switching to ING Direct right now. I am going with them because I need a checking account. And I really do not want to have my checking account at ING and my savings at HSBC. We have a savings account also, but it is more of a backup account more than anything. I would rather sacrifice the extra 20 to 30 bucks of interest I would make a year for the convenience factor alone.
10
Mike Says:
September 21st, 2007 at 8:17 am
I stick with ING (and will continue to) because I LOVE the way you can set up subaccounts within an account. I’ve currently got eleven subaccounts for various funds (vacation, auto insurance, new windows, etc.), and I don’t want to give them up. I like the clear definition in my savings goals.
11
John Says:
September 21st, 2007 at 9:49 am
I use Emigrant. The only knock I have on them is the process to link an account to the online savings account is a little labor-intensive. You have to print out a form, fill it out and mail it back to them. Then they will send test amounts to the account you defined on the paper, and then you have to verify those amounts online. I wish the whole process were online, but other than that, it has been good for me…
12
Blaine Moore Says:
September 21st, 2007 at 11:32 am
I have a little bit with emigrant, but I don’t trust them anymore after their website fiasco a year or two ago.
13
JustBeth Says:
September 21st, 2007 at 1:36 pm
Like Mike, I keep money in ingdirect simply because the sub-accounts are really nice to use for budgeting–I have subaccounts for annual/six-month expenses. I can save up monthly so the money is there when my insurance needs to be paid, etc.

However, my regular savings should be moved elsewhere. I’m working on finding somewhere for it.
14
CK Says:
September 21st, 2007 at 1:39 pm
I use Emigrant and have had no problems, I would recommend it.
15
Robert Says:
September 22nd, 2007 at 5:56 pm
Show me ANYTHING easier than ING? Pool your savings and checking funds in Electric Orange (checking acct). At 50K you’re making 4.9% now. I set my parents up with the same account. I pay all their bills on my cash rewards credit card and they electric check me the cash at their convenience. They love it! No stamps or envelopes for them to deal with. Their billpay is flawless and simple. Free Allpoint ATM’s are everywhere. Customer service is available in seconds. I’m told trust accounts will be coming soon. I link an American bank e-checking from yesteryear for the rare third party check deposit (prepaid envelopes). Where is the HSBC advantage?
16
nickel Says:
September 22nd, 2007 at 5:59 pm
HSBC = 5.05% on balances of any size.

Moreover, while Electric Orange is kind of cool, checking accounts that don’t offer actual checks aren’t all that helpful for some people (like those with kids who need to write checks for school lunches, Cub Scout fundraisers, etc.)
17
Robert Says:
September 22nd, 2007 at 7:18 pm
Hence the reason for keeping the American e-checking account linked to electric orange. I get free paper checks, ATM reimbursement, and postage-free envelopes for deposits. Granted, comparing this to HSBC (5.05%) It’s slightly more expensive, but more than compensated for by the “task time” of ING vs. HSBC.

As for checkwriting, there are better ways. For school meals consider recommending a swipe card system that can be recharged online:
http://www.eagletribune.com/pu....._081093844

For scout contributions use PaySimple:
http://www.paysimple.com/pressrelease_scouts.html

Great board…thanks for your efforts!
18
nickel Says:
September 22nd, 2007 at 7:23 pm
So now you have three accounts to handle what I do with two (HSBC Direct and a linked local checking account). I’ve used HSBC, ING and Emigrant and honestly the only real difference between their savings accounts is ING’s ability to easily create subaccounts. This is really a great feature if you need it. But otherwise, there is relatively little difference (unless you choose to add ING checking on top of their savings).

Also, HSBC is “slightly” higher for balances over $50k, but significantly higher for anything less (remember, ING is now paying a base rate of 4.30%).
19
Robert Says:
September 22nd, 2007 at 7:56 pm
I rarely use the ING savings account and don’t use subaccounts. All comments pertain to ING checking. Direct deposit, all savings, all checking funds go there. I’ve kept my other linked checking account and local bank as a safety net but haven’t used the local bank in over 5 years and have used the linked account once in six months. Both of them will soon be history.
Firing money directly to people’s accounts (ING and non-ING) works beautifully and will likely become more popular with other banks.
The convenience of working out of one account should not be underestimated. It’s a joy paying bills and monitoring account activity. Email alerts keep you updated as to what money is moving where, as well as the more helpful advance notices informing you of an expected transaction should you need to shift funds.

Agreed…you need to hit the 50K cutoff ( I don’t claim this is easy) to really reap the benefits, but to have your emergency fund, checking, billpaying, and savings in one place really saves time.
20
nickel Says:
September 22nd, 2007 at 8:18 pm
Gotcha… I thought you were using both account types. My bad. But yeah, if you can hit the $50k mark, then running with just the Electric Orange account instead of online savings sounds pretty attractive. Again, with all the random check writing that comes along with having kids, we still have to keep a local paper-based checking account. But I’d love to be able to further simplify our finances.
21
arthur Says:
September 22nd, 2007 at 8:20 pm
ING’s rate cut was the last straw and I moved my money over to an HSBC savings account. I recently also setup a Citibank online account because they gave me $50 to open it. No idea what the big attraction to subaccounts is, but it sure isn’t worth .75% to me. It’s too bad about ING, they have the best website by far. Now I wish that my HELOC rate would drop as fast as the savings rates.
22
nickel Says:
September 22nd, 2007 at 8:24 pm
arthur: Yeah, it’s interesting how quickly the savings rate drops and how slowly the loan rates drop.
23
thomas Says:
September 24th, 2007 at 3:46 am
As a longtime ING customer, this was the final straw. I moved most of my money to HSBC months ago, but the “quickness” in them lowering rates and inability to raise them at the same speed is enough for me to say bye. I love their site and have had no problems whatsoever, but I’m not going to let them not let me make money. I hate rate chasing, but sometimes it is necessary.
24
Aaron Says:
September 26th, 2007 at 1:32 am
ING certainly has fallen out of the leadership position as far as the best yields. I would have expected them to remain a little more competitive than they have.
25
kane Says:
September 26th, 2007 at 1:02 pm
Damn you ing!
26
Jeff Says:
September 27th, 2007 at 11:48 am
Looks like HSBC decided to join ING Direct in the rate cuts. HSBC is now paying 4.5%, although it’s still higher than ING Direct, HSBC dropped their rate .55%!!
27
Matt Says:
June 8th, 2008 at 1:03 am
No wonder, ING had only one incident of fraud as oppose to HSBC and Bank of American in hundreds of thousands of cases. ING is the best …

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