ING Direct, an abbreviation for “Internationale Nederlanden Groep”, is a relatively new online financial & banking institution making inroads worldwide by offering consumers an online banking option that differs from today’s standard “brick & mortar” banks. Its origins date back to the early 1990’s and culminated in the easing of strategic partnership restrictions between insurers and banks. While almost all of today’s banks have an online banking presence, ING is unique in that it only operates online. It has no branches and doesn’t operate any remote banking locations of any kind. Because of this, ING’s cost structure is much less than other banks that must contend with the costs of managing branches, ATM’s, banking facilities and branch employees. Part of ING’s allure to the general consumer comes in the form of relatively high interest rates on its savings and checking accounts. In addition, these accounts have absolutely no monthly or transaction fees of any kind. ING’s moniker, or slogan, is “save your money”. Given the recent indifference and animosity towards banks amid this global recession, ING seems to have struck a cord with consumers by giving them exactly what they want; an opportunity to earn a competitive interest rate without getting gouged in the process. Aside from its banking accounts, ING is a substantial banking entity that offers its clients a wide range of investments options, personal life insurance, mortgages and retirement plans. ING’s mortgage rates are considered extremely competitive when compared to its competition.
One of ING’s flagship products is its “Electric Orange” high yield checking account, which boasts an interest rate of 0.25% to 1.25%. While this doesn’t seem particularly high, it is quite substantial for a checking account. This is especially important considering most other banks have a myriad of transaction and withdrawal fees that make it extremely difficult to accrue any interest whatsoever. While the 1.25% interest rate requires a balance of over $100,000.00, individuals who open an Electric Orange account are still able to benefit from the 0.25% interest rate on balances as low as $1.00. In fact, this seems to be the main selling point for consumers who choose to open up ING accounts, regardless of whether they are savings or checking accounts. Ease-of-use is what most people find appealing about ING. All accounts require no more than a single dollar to start earning competitive interest rates and access to bill payments online is fairly straightforward. Like other banking institutions, ING offers its clients physical checks, and the option of transferring money for bill payments or between other ING sub-accounts. Current ING interest rates on savings accounts are around 1.5%, but have been as high as 2.75%. ING prides itself on helping individuals save money while offering all of the amenities of other banks. So, it seems like ING is meeting all of its customers’ needs, or is it?
While there are a considerable number of benefits with ING, there are some drawbacks. Part of ING’s success is its lower cost structure. However, with this comes the lack of face to face customer service that is so often needed when discussing someone’s finances. There are some issues that are better discussed in person. Discussing issues pertaining to mortgages and life insurance is always best done where the consumer and banking representative can have a free exchange of questions and answers. Aside from this, individuals who want to open an ING account must have an existing bank account at another institution. To open an ING account requires the applicant mail a voided check to ING in order to set up a link between the ING account and the individual’s main checking or savings account. This doesn’t happen immediately and does take several working days. In addition, transferring money to and from an ING account to another bank account isn’t immediate and there is a lag of several days. While ING does offer its clientele higher interest rates than standard banks, there are consumer issues pertaining to customers service and face time.