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.
The book, The Orange Code: How ING Direct Succeeded by Being a Rebel with a Cause, talks about business strategy and "how personal financial empowerment has made everyone a winner."
I haven't had a chance to read it yet, but here's what the reviewers at Amazon are saying:
This book got me thinking about why everyone mimics everyone else in business. Why do all banks act the same way (have branches, credit cards, ATMs, car loans, checking accounts, etc.)? For that matter, why do almost all car dealerships, or department stores, airlines, etc. act in the smae way?
Arkadi Kuhlmann has provided his own answer by trashing some of the sacred practices of established banks and creating a new company that is wildly successful by standing for something in the face of the customer.
Thomas A. Farin "Bank Consultant":
I expected to be told most of what I already knew. Instead I found it full of insight on ING Direct's core principals, its branding strategy, its thought process behind its maverick behavior, management communication and a number of things I hadn't thought about. Those things are core to an outstanding success story.
If you intend to reinvent your business it is a 'must read'. I will be ordering a copy for each of our staff members to prepare those willing to make the committment for a planning retreat in which we intend to reinvent our business. I suggest you do the same.
Have you had a chance to read it yet? I'm going to get a copy and, when I finish, will review it here.
This guy found out the hard way.
ING Direct filed a civil suit against Breck Yunits in U.S. District Court last week, claiming the 2007 Duke University graduate used the ING trademark and potential customers’ e-mails to improperly gain close to $10,000 from the bank’s “Refer a Friend” program. …
In the suit, ING alleges Breck Yunits created a Web site with an address and domain name “ingdirect25.com” in May, a move that infringed on the corporate name and trademark, the lawsuit said.
Further, through the Web site, ING alleges Breck Yunits referred 918 new customers – far more than the limit of 25, resulting in a profit of $9,180, far in excess of the $250 limit, per the rules of the promotion, the lawsuit said.
While the suit is technically over the use of ING Direct's name in his site's promotion, Yuntis's brother alleges the bank paid out all of the referral bonuses — and then took them away from his account with no warning.
“They never, ever notified him, never sent a written notice, never told him to stop, never issued a cease and desist,” Conor Yunits said. “In fact, he had been getting phone calls from them all summer long, thanking him for the referrals.”
For a bank with such good customer service and technological foresight, it's surprising to hear that they would be sloppy enough to let any user use more than 25 referrals.
Massive hat tip: The Sun's Financial Diary
WTDirect has dropped the rate on their online savings account to 3.06% APY, down from 3.31%.
While that's a pretty significant drop, the rate is still pretty competitive with a number of the other accounts out there.
Yesterday, I closed my E-Loan online savings account.
I'd been thinking about doing it for awhile now, but finally made the request and have moved all of my money to ING Direct.
Despite being one of the most promising online savings accounts when it first came out, E-Loan couldn't compete on a customer-friendly level with other online banks.
Not telling your customers when the rate changes is cheap.
Not allowing your customers to move their money to more than one bank every 4 months is controlling.
Not letting new savers get the same rates as those with biggers coffers is discouraging.
Even though they offer a lower rate, ING Direct lets you do whatever you want with your money.
Remember: it's your money. Don't let someone else control it.
That's why I closed my E-Loan account.
In October, he put forth The Declaration of Financial Independence, and today, he's addressing the country's current economic situation.
Economic Situation- A letter to our Customers from the CEO of Savings, Arkadi Kuhlmann
As we enter the final few months of 2008 I want to thank you for your continued confidence in ING DIRECT. Over 700,000 new Savers have joined us so far this year strengthening the bank and their own financial footing through our savings, home mortgage and ShareBuilder investment accounts. Despite a challenging economic climate our Customer base is 7 million strong and growing.
The consequences of the mortgage meltdown on financial institutions and individuals continue to erode many American dreams. We will continue to stress the right way to achieve home ownership – buy only as much house as you can afford and pay off your mortgage as fast as possible. In return for good credit and prioritizing home investment, ING DIRECT mortgage Customers are rewarded with exceptional rates and a transparent, direct administration process. Rather than selling your mortgage to another bank or investor the minute you get it, we keep your mortgage and service it here. Doing so gives us flexibility to find innovative solutions to help Customers keep their homes during unexpected financial downturns.
While we don’t have an Orange crystal ball we do expect the economy to remain fragile through 2009. The best course of action for our Customers is to be disciplined: avoid splurges; identify and cut out unnecessary expenses; save for what’s essential; and hedge against these tough times. We can all benefit by developing good spending habits: confront — and cut up — credit cards; use your home as a savings vehicle — not as an ATM; and establish and contribute regularly to an IRA or 401(k).
In this difficult financial environment, we work tirelessly to safeguard your deposits, mortgages and investments. Importantly, your deposits are FDIC-insured according to its limits and your investments are SIPC-protected. Our security processes are the best in the business and are in place to protect your money from those with bad intentions. While we are constantly vigilant, we need your help. Keep passwords to yourself. Never give personal information through an email. And always install both the latest antivirus and anti-malware software on your home computer.
Thank you for your continued trust in ING DIRECT. We will not waver in our promise to provide you with great value, service, security and convenience.
CEO of Savings
This is one of the reasons customers stick with ING Direct despite better rates from other banks. ING Direct seems to care about its customers and has their best interests in mind.
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, one of the pioneering online banks, has announced its new "We, The Savers" push, encouraging Americans to focus on finance fundamentals and put saving first.
In a letter on their Web site, CEO Arkadi Kuhlmann writes that we've made some mistakes, but can emerge stronger:
There's no denying it: America is in a tough financial spot, and some of the people in our financial industries have a lot to answer for. Eventually, they will. In the meantime, there is no way to turn back the clock on this crisis and not much the average person can do to alter its course. It has to play itself out, and we have to believe – and insist – that those responsible will play their parts in fixing it.
But what we can do is make sure, as the song says, we don't get fooled again.
Below is a 10-point plan for exactly that. If you live by it, you'll be in control of your financial life. If everybody lives by it, we'll live in a stronger nation. We urge every American family to read it, talk about it together, commit to it. Then print it out and tape it to your refrigerator door. It's a declaration of financial independence that will put your future into your own hands, where it was always meant to be.
ING's 10-point plan is as follows.
We can't argue with any of the points — the level of finanical knowledge in the U.S. is way too low, and anything that can be done to improve it is a step in the right direction.
Here's what we would add to the decleration:
What would you add to ING's Decleration of Financail Independence?
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 has a great feature on their site about establishing your financial goals and how to get there.
Their three steps:
If you don't have access to an ING Direct account (get started with $25 free), here's the extended version of the plan.
Step 1 — Get it down on paper
The first step in planning a trip is to know exactly where you’re going. The same is true for your financial plans. With a specific plan, you can stop drifting along and start driving.
Step 2 — The long, medium, and short of it
As you make your list of goals, you need to think about when you will want to achieve them:
* Short-term goals (1-3 years), such as paying off debt or renovating your house
* Medium-term goals (4-10 years), such as saving enough for a down payment on a house, or building your IRA, 529 college savings plans, and other tax-deferred accounts
* Long-term goals (10+ years), such as paying for your toddler’s college education or retiring comfortably
Remember: No goal is short-, medium-, or long-term by definition. Retirement might be a long-term goal if you’re 30, but a short-term goal if you’re 65. A college education might be a long-term goal for a toddler, but a short-term one for a teenager. The more specific your time frame, the more you’ll want to make sure you have money available when you need it.
Step 3 — How much are my dreams likely to cost?
If you don’t know what each of your goals will cost, you’ll need to do a little research. Ballpark numbers are fine. For goals that are more than a few years away, inflation is worth thinking about. Historically, inflation has averaged about 3% per year. At that rate, a home renovation that costs $30,000 today will cost about $35,000 in five years and about $40,000 in ten. Getting the best rate you can for your savings can help you keep the value of your money where it should be.
Never too soon
Of all the goals you set for yourself, preparing for a comfortable and satisfying retirement should be a priority. Studies show that average US households are saving enough to replace less than 60% of their pre-retirement income during retirement. But most experts agree that you’ll need about 85% of your pre-retirement income for a comfortable retirement. Saving now (rather than putting it off till later) can make the difference between just dreaming about retirement and having the retirement of your dreams.