ING Direct

ING Direct is an online bank offerings accounts in a category usually referred to as online, high yield savings accounts. I have personally had an account with ING Direct for almost 5 years now and have really enjoyed my experience with them.

ING Direct is different than your average bank or credit union. It doesn’t have local branches. You can’t walk into a building and speak to a representative face to face. Deposits made to the account are not always immediately available for withdrawal. In fact, you can’t even order check books! So, why would you consider using such an institution?

Because ING Direct doesn’t have the overhead of branches (and, therefore, employees), it is typically able to offer you a much higher interest rate on your deposited money than the traditional brick and mortar institution would be able to. This makes it an ideal candidate for hosting your emergency fund or other short and long term savings funds. The money is accessible, yet enough of a hassle to get to that it makes you think twice before spending money you shouldn’t. Your deposits are also insured by the FDIC just like they would be at any other bank.

How it works

As with any financial institution, you can set up your direct deposit to go straight to you ING Direct account. This grants you immediate access to the funds through your Orange Checking account; while you can’t get checks, you do get a debit card that can be used fee-free at ATM’s throughout the country (and even some outside of the country).

To access the rest of your funds, however, you need to link your ING Direct account to a checking account at your local financial institution. That’s right, even though ING Direct doesn’t have local branches, you are required to have an account with a brick and mortar bank or credit union. Once the accounts are linked, you can then initiate transfers from one account to the other. These transfers usually take about 2 business days and are pretty easy to set up. One special note here to be aware (and beware) of: funds transfered from your local checking account to ING Direct are not available for withdrawal for 5 business days and do not start accruing interest for two days after the transfer is complete. This is a relatively minor issue for me, however, as most of the transfers I make to my ING Direct account are for long-term use.

And as with most financial institutions these days, ING Direct does offer free bill pay services. So, it can really serve as a great options for all of your financial transactions! You can also sync your transactions with financial software and online sites like mint.com.

The ING Direct “sub-account”

Many users of ING Direct (myself included) seem to stick with it for one additional reason: you are able to set up as many savings accounts as you would like under your general account. This means that you can have one account set up for your emergency fund, another for regular automobile expenses, another for your house down payment, and yet another for your looming tuition bill! Sure, you could just budget these accounts on paper, but the ease with which you can set up and manage these so-called sub-accounts makes the process very easy. In short, sub-accounts are the way that I manage most of my major budget categories. It’s an awesome way to help you meet your financial goals.

The referral program

Rather than telling you that ING Direct has a special bonus promotion going on, I’ll tell you the truth. ING Direct is always seeking ways to broaden its customer base through its referral program. Existing customers are given the opportunity to invite their friends, relatives, etc. to join and receive a $25 account opening bonus. This creates a no-cost method and incentive of getting started with ING so you can check it out and see what you think. If you’re interested in this offer, let me (or any one of many hundreds of people you can easily find online) know and I’d be happy to send you an email link so you can take advantage of it. I’ll also go the extra mile and tell you what most others do not: If you accept a referral from an existing member, you get a $25 bonus and the referrer (me, or whomever else you choose as your referrer) will receive a $10 referral bonus. Do with that what you will!

Are you a customer with ING Direct? What do you think of it? If not, do you have any concerns with the idea of doing business with an online bank?