Since 2000, ING has offered consumers in the United States online savings accounts as an alternative to accounts at brick-and-mortar banks.  Because ING Direct operates solely online with less overhead, they are able to offer much better interest rates than these traditional banks.  In fact, ING’s rates are about five times that of the national average.  But how does ING stack up to the competition?  Is the extra interest rate worth the hassle of banking online? 

How ING Accounts Operate

ING Direct savings accounts need to be linked to at least one external checking account so that you can fund your online account.  If you have accounts at other banks, you can add up to three external accounts to your ING account.  It is very simple and easy to transfer money to and from your online bank account—simply specify which accounts you transfer between. 

When transferring money from an external bank to your ING account, it will take two business days to post online, and these funds will not be available for withdrawal for at least ten days.  When transferring from ING to an external account, your money will be posted and available generally in two business days.  This can be a minor annoyance if you are not used to your money being essentially frozen for a few days.  The reason the funds take so long to transfer is because both banks making the transaction must make sure that the funds actually exist.

Keep in mind, even though this is an online bank, it still has to abide by all federal regulations for savings accounts.  This means that you cannot withdraw more than six times in any given thirty day period. 

The Interest Rates

When I first opened my ING account, the interest rate was over four percent! Today that number is completely unheard of even for a certificate of deposit, much less a liquid savings account.  Currently, the ING APY is right around one percent.  This number is still significantly above the national average and still warrants a long look at ING Direct. 

Unfortunately, because of a number of economic factors, ING has had to continually lower the interest rate they offer their customers.  This is somewhat disheartening, but comparatively, their rates are still among the best in the country. 

A handful of other online banks offer better interest rates than ING Direct including Ally Bank and Smarty Pig.  Before opening up any online account, take a long look at these three banks and see what they have to offer. 

ING and Sharebuilder

In 2007, ING purchase the online discount broker  After this purchase, ING integrated their online savings accounts at ING Direct and their customer’s brokerage accounts at Sharebuilder.  This meant that consumers could instantly transfer funds between both online accounts.  This is a great feature for anyone who has an account with Sharebuilder since there is not waiting period to transfer funds. 

Other Features of ING Direct


One of the best features of ING Direct are the subaccount customers can open for targeted savings.  This means that you can create multiple accounts to save for infrequent expenses such as a new car, a down payment, an emergency fund, or money for Christmas.  Each of these accounts receives the same, high APY that your main account does. 

Checking Accounts

With free checking becoming a thing of the past, ING Direct still offers consumers a checking account that is completely free.  Users can sign up online and will receive a debit card from ING within 7 days.  APY rates on the checking accounts are still relatively high when compared to other banks, but they are significantly less than the rates given on ING’s traditional savings accounts. 

If you want to open a checking account with ING Direct, do a Google search to see if they are currently running any promotions.  Usually, ING will pay you at least $25 to just open up a checking account. 

CD’s, Mortgages, and Business Accounts

ING Direct does offer an array of certificate of deposit accounts.  These rates are generally lower than their normal savings account rates, so there is little to no incentive to open up a CD with ING. 

They also offer home loans at a very low interest rates.  All of their loans are adjustable rate and have very low closing costs. 

Finally, ING direct does offer business savings accounts.  The rates are lower than personal accounts, but are still significantly above the national average. 

The Verdict

I have held my ING Direct account for over four years now, and it was one of the best financial moves of my life.  It has not significantly changed my financial well-being, but a couple extra hundred dollars from interest in my ING accounts is nothing to overlook.   Savings rates are much lower now than four years ago, but I am comforted by the fact that my money is still working for me.  If I simply had my money parked in a savings account at the local bank, my returns would not be nearly as good. 

So if you do not have an ING Direct account already, do some shopping around.  But do not wait too long.  It is time that you start making your money work for you!