Tuesday, February 17, 2009

Online Bank Comparisons: ING

This is the first in a series of three blogs comparing the online banks I use regularly. The second post (about HSBC) will be up Wednesday and the third (covering SmartyPig) will appear on Thursday.

This post has been edited to provide the current interest rates for the listed companies. They are correct as of 2-19-2009.

My first foray into online banking was with ING Direct. This isn't surprising; Trent of The Simple Dollar swears by it, and he's not alone. In fact, my sister actually started using it before I did, and invited me to join her. (She wasn't being entirely altruistic; ING was running a promotion where they offered her $25 for each new user she signed up. Alas, she got to me too late, as I had joined ING earlier that week.) In short, it's one of the most popular, and widely used, online banks out there.

But, just how good is it? Let's take a look at some of ING's features, and see how they compare:

Ease of Use:
ING is one of the easiest sites I've ever used, financial or otherwise. After a quick and easy registration process (it takes about ten minutes, assuming you have the information about your checking account at a brick and mortar bank available), you can easily open a checking account, savings account, or CDs as necessary. The guides and FAQs are clear and complete, making it easy for beginners to learn all they need about the accounts with ING.

Transfer Speed: ING moves the fastest of the three sites I regularly use, transferring funds into other banks within two days (as opposed to three for my other two accounts). It's a relatively small difference, but it does make it easier to organize my funds, as well as cutting down on the time I need in order to pay my bills or do other money transfers.

Interest Rates: The only downside of ING is the lackluster interest rate offered for its savings account. At 1.85%, (as of 2-19-2009), it's significantly less than either HSBC (2.25%) or SmartyPig (3.25%). This is pretty consistent; expect about half a percentage point more interest with HSBC and a full percentage point or more from SmartyPig. If you're only looking for a high interest rate (for say, an emergency fund or other money you intend to deposit and not touch for a while), you can do better than ING.

Extras: Two nice perks that ING offers-
-The ability to link to a Sharebuilder account; if you, like me, consider Sharebuilder a high quality investment site, it's nice to have access to both accounts in one window (as well as the ease of using funds in the ING account to buy stocks and ETFs via Sharebuilder).
-As alluded to above, ING offers occasional bonuses for signing up friends and family. In the case I mentioned, my sister would have received $25 for referring me, and I would have received $10 for opening an account.

Overall: 4.5/5 - ING is a high quality, very accessible online bank. The only real downside is the low interest rate, but if you are like me, that's enough to ding the overall score. Still, ING remains one of the most useful and easy to use online banks.

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