ING Direct has dropped the rate of its Electric Orange checking account to a 0.5% APY for balances of less than $50,000.
For accounts with more money, the rate is a bit higher. Here's a full look:
I use an Electric Orange account as a secondary checking account, and I've never had a problem with it. It doesn't make sense to use it as a savings account — that's what the Orange savings account is for.
Bankrate recently announced the results of its 2008 Checking Study and found some interesting results:
The 22 checking accounts we surveyed at 18 online institutions show that they can be somewhat pricey, especially if you're intent on earning interest, but at least they pay decent interest. You may find that abiding by a couple of minor stipulations will eliminate fees.
Honestly, I'm not sure Bankrate did a great job of really looking at online banks — and it's a little confusing just exactly who they surveyed.
The text above says "online institutions" — implying online banks — but their methodology says they "surveyed one interest checking account and one noninterest checking account at each of the largest banks and thrifts in each of 25 large markets."
That seems to imply they are looking at the online versions of brick and mortar banks, but I'm not totally sure.
If you're looking to open an online checking account, the best is ING's Electric Orange.
When you open an account with at least $250, you'll get an automatic $25 deposited as a bonus.
It's got no fees, no minimums and is super-easy to use.
ING Direct's Orange Savings Account has fallen from to 2.75% APY (down from 3.00%).
ING also changed their rates on their Electric Orange checking account:
ING's online savings account hasn't been in the top tier of APYs for some time now, but many of their customers enjoy the service so much they don't seem to mind.
Personally, I have an Electric Orange account for my business and an Orange Savings Account for a short-term car fund.
ING Direct, probably the best known online bank, had "a record number of new savers, deposits and home mortgage loans" in 2007, according to an email from CEO Arkadi Kuhlmann sent to its customers.
I am happy to report that ING DIRECT's 2007 financial results are complete. Your confidence in us helped us deliver a record number of new savers, deposits and home mortgage loans. Further, we acquired ShareBuilder so we could offer you a low cost way to invest in stocks and ETFs. I'm proud of our first 7 years, but there's work to be done.
Global financial markets ended 2007 with many challenges ahead. While ING DIRECT avoided the sub-prime mortgage problem, we understand that this housing crisis threatens the well-being of countless families and, in the end, it will be seen as a major failing of the mortgage industry and its regulators.
The fact that ING DIRECT was not adversely affected is a testament to our operating philosophy that, as Americans, we should only buy houses we can afford. That way we can keep them for years to come. We believe a mortgage is a contract that both parties should execute in good faith and expect to see through to its conclusion. We will not waver from our sworn promise to provide you with great value, service and convenience.
Thank you for your continued trust in us. Stay tuned in 2008 for new ideas we'll offer to help you save your money.
The CEO of Saving
While ING hasn't been delivering the leading interest rates on its online savings account for some time, they have continued to innovate with new products like the Electric Orange checking account and business online savings account.
Kuhlmann has been an outspoken advocate of understanding you financial situation (he's not the only one) and has argued that, even though ING only offers adjustable rate mortgages, they ARE right for some people.
I don't keep any money with them anymore — there are too many better paying options — but I know that some people do because of the ease of use and dedication to the company. I wouldn't do it, but more power to them.