Orange Is My Favorite Color...
Written: Sep 02 '06
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Product Rating:
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Pros: High APY, no minimum deposit required for Savings or CD, fun website.
Cons: Funds not immediately available for withdrawal as they are from a regular bank.
The Bottom Line: It makes sense to put your money where it will achieve its greatest potential. Why wouldn't anyone not want free money?
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| trustigious's Full Review: ING Direct |
THE ORANGE SAVINGS ACCOUNT
ING Direct is becoming renowned for their “Orange Savings Account” which is a friendly high-yield money market account that requires no minimum balance to either open or maintain. The current APY (Annual Percentage Yield) is 4.35%, which is what you would accrue as a return when compound interest is calculated. This means that if you were to deposit $100 into the account on January 1st and made no more deposits into the account for the rest of the year, you would have accrued $4.35 by January 1st of the next year. That doesn't sound all that exciting, but you can easily do the math for larger sums of money, i.e. $1,000 = $43.50, $10,000 = $435.00, and so on. If a person saved $300,000 to retire on, he/she would receive a yearly income of $13,050, or $1,087.50 per month, which would supplement a Social Security income nicely.
Why does ING Direct offer such a high yield to its customers, you might ask? (Most banks offer between 0.4 and 1.00% APY on savings accounts.) Because, unlike your regular bank, ING Direct has no branch locations to maintain with their employees, no ATMs, etc. This drastically reduces the overhead they have to pay out and they gladly pass the savings on to you. They also save money on paper, ink, postage fees because they prefer that you bank with them on-line and receive web correspondence. Of course, you can do business through traditional snail mail if you prefer and handle other details over the phone as well. You won’t be penalized for it. But, if you sign-up for an account on-line, you will not have the option of receiving any postage-mailed paper quarterly statements from them. They will send you an e-mail with a link to your account and you can save your statements in PDF file format.
THE ORANGE CD
In addition to their wonderful Savings Account, ING Direct also offers high-yield Certificates of Deposit, or CDs. The best thing about their CDs is that, unlike many other on-line competitors, they don’t require a minimum balance for opening an account. They offer 6, 9, 12 through 60 month (5 years) terms and the highest yield is 5.2% APY on a 12 month term. The longer terms also offer the same high rate. Opening a long-term CD can be considered intelligent if you think interest rates are going to go down in the near future and you can lock-in on a high rate for the life of the CD.
Note: CDs will penalize you with a fee from your interest and sometimes also from the principle if you try to withdraw money from them before the maturity date. Only invest what money you don’t immediately need.
OTHER GREAT QUALITIES
Both types of accounts are FDIC insured up to $100,000 so you can be sure that these types of investments are low-risk, just like your local bank. You do need a legitimate checking account with another bank, since ING Direct does not offer checking accounts. You will need to link it with your ING Direct account and, in the case of the Orange Savings Account, you will need to wait for at least 10 business days before your money will be available for withdrawal just after opening it. After that, you can withdraw from your Savings Account anytime and you can make deposits as often as you wish from the very beginning. When making a withdrawal, you will need to request that your money be transferred to your checking account, and ING Direct will electronically send it to your other bank in about 3 business days (no sooner, unfortunately).
When banking on-line, you will need to use your 8-digit customer number assigned to you along with your selected PIN number and a rotating number, which is usually the first 3 or 4 digits of your SSN. This will get you to a page with all of your accounts listed so you can access them immediately. They will require that you choose an icon of whatever you want from a list of images that will be associated with your account to further protect it from on-line hackers. It is very, very safe to bank with ING Direct on-line. Also, they have a referral program that offers account holders $10 per referral, up to $200 in maximum earnings.
OTHER TYPES OF ACCOUNTS
--Orange Home Loans: 5.95 (6.640 APR) rate, one low closing cost.
--Orange Home Equity lines of credit: rates at 8.25% variable APR (try never to open a HELOC, especially with a variable rate. It’s just not smart to risk losing your home!)
--The Orange Investment Account with 9 mutual funds (not protected by the FDIC, no guarantee of return, but probably a great place to invest in Mutual Funds if you can. I’d do it if I could afford it).
–The Orange Investment Account Traditional and Roth IRA: transfer your existing compatible retirement accounts (IRA, 401k, etc.) into an ING Direct IRA account.
WHAT I GOT
I have an Orange Savings Account and an Orange CD with ING Direct and I couldn't be happier about doing business with them. They are fair and customer-friendly. You can contact them by e-mail, mail, or phone anytime with questions (new accounts: sales@ingdirect.com). Check their FAQ page for any help and find advice on how to make your money earn more money with the “Managing My Money” link! They care about helping the average person enrich him/herself and you don't have to be a financial wizard or wealthy to take advantage of the savings...
Recommended:
Yes
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Epinions.com ID:
trustigious
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Member: Cathy
Location: Orange County, CA (USA)
Reviews written: 4
Trusted by: 0 members
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