About 6 years ago I decided I should be smart about my money and I did a bunch of research to figure out the best way to maximize my income. This was in the days before I had a house so I had some spare cash laying around. Aside from investing in retirement, buying some mutual funds, and dabbling with the stock market, I shopped around for the best banking deals out there.
At the time, the best checking account going was with First Internet Bank of Indiana. They were one of the very first Internet-only banks on the planet. Because they didn’t have “brick and mortar”, aka buildings, they could theoretically provide much higher interest rates than traditional banks. At the time, they were offering about .75% more in interest than most banks plus there were no fees and as-good-as-free ATM utilization.
So I moved my checking account there 6 years ago and I’m still a happy customer. It’s still a vibrant bank and this weekend they are going to do some major upgrades to their backend system and possibly to the front end website.
As for my savings account, all of my turn of the century research pointed to using ING Direct for my savings account. They were offering really high interest rates for savings accounts, almost as high as long term Certificates of Deposit. To me, it was a no brainer to set up an account with ING Direct and start sending money their way.
My only trepidation was that this was a new offering from a company of which I had never known about. I sent in a few hundred dollars and this was reflected in my online balance. One day I decided to see if they would return my money as easily as they took it and they most certainly did. Outstanding. They pay a high interest rate and it’s not a scam.
There are one or two small caveats with ING Direct. Because they are an online-only bank you can only get money to them by sending a check which they cash and (once it clears) the money shows up on your account. The other way is via an ACH transfer (bank to bank electronic transfer) which you can do via most online bank websites but this takes 2 or 3 days to go through. Furthermore, ING began putting a hold on money transferred in so you can’t get immediate access to it even efter the ACH has gone through.
I can only think of 2 reasons for the 7 day hold:
1.) They don’t want people constantly moving money back and forth like you might do with a traditional savings account.
2.) They are doing some short term investing of your money so they can get a better return on their money on the backend (thus possibly helping to fund their much higher interest rates).
Because of these 2 reasons, I always considered my ING Direct account to be a near-line savings account (a term stolen from near-line storage in the IT world). The money is nearly immediately accessible but not nearly as accessible as in a traditional savings account. However, the money is not locked up long term like it might be in a Certificate of Deposit. (BTW – if you were ever in a real pinch, ING could wire you the money via Western Union (at a fee, of course))
All of this brings me to ING’s latest addition to their consumer banking offerings and that would be the Electric Orange checking account. This is an online-only checking account that, like the ING Direct savings account, pays ridiculously high interest rates for a checking account.
As of this writing, if you have less than $50,000 in your checking account, you would earn a 4.5% Annual Percentage Yield (APY). According to bankrate.com, local banks in my area are offering APY’s of a whopping 0.25, 0.45, and 0.5 percent. So clearly, my less-than-$50,000 checking account will earn me plenty of free money, at least when compared with the local banks. (And if I were a real player and had over $50,000 in my checking account, I could earn 5.25% APY. Ah yes…the rich get richer…)
I just got my Electric Orange checking account set up a few weeks ago. The checking has Free ATM so long as you go to one of the ATM’s that are a member of the “Allpoint Network”. The ING Electric Orange website provides a handy lookup to finding the closest Allpoint ATM to wherever you might be. They claim that there are over 32,000 locations and most of them seem to be in restaurants, grocery stores, and bars.
So free Nationwide ATM is a nice feature.
You also get a MasterCard debit card which has worked perfectly well for me the 3 or 4 times I’ve used it so far.
I tried their free Bill Pay service a few nights ago. I guess I’ll find out if it works when the check clears and/or I get a late notice from the gas company.
One of the ways that ING chose to cut costs is by not providing any physical checks at all. So if you’re one of those people who likes holding up the checkout line so you can fill out a longhand check and balance your checkbook while at the counter well….ING won’t give you any checks so there will be no checkbook balancing while standing in line.
You can send an unlimited amount of free, electric checks which is basically a PayPal type of service that does an ACH transfer on the backend. According to ING, an Electric Check works like this: “Simply enter the person’s information, the details of the payment, and an email will be sent to the recipient. The person can click on the link within the email to go to a secure page to enter their account information and the money is transferred!”
The other option is to send a free paper check via ING. Basically, they print out the check and mail it for you all for free. Heck, that’s worth it just to save on the postage stamp.
So how do you get money into the Electric Orange Account? Well, there are several ways. You can send a check in and once it cashes, it is added to your account. You can do direct deposit of your payroll check. You can do an ACH transfer. Or, if you’re like me, you can transfer money back and forth from your ING Direct savings account to your Electric Orange account and back. That is how I have been funding the checking account so far and the cash transfers are instantaneous.
I’m sure my opinion will change some over time but right now I’m pretty excited about this account and may soon convert it to my primary checking account and redirect my direct deposit payroll to ING.
For free checking, overdraft protection, free bill pay, free ATM, a MasterCard debit card, free paper check sending, no minimum balance, and 4.5% APY interest I find it hard to find something negative about this so far.