Electric Orange

As you may have known, I’m not a big fan of ING Direct after what they pulled last time. However they’ve introduced a new account called Orange Electric, which is probably the best I’ve seen in the current market. It’s basically a checking account with high interest rates, although not as high as the savings accounts.

From their press release:

The expansion, which Kuhlmann termed “audacious,” comes as the bank plans to offer high-yield online checking accounts amid intensifying competition. ING DIRECT will make the checking accounts, dubbed “Electric Orange,” available nationally Feb. 1. It plans a limited introduction next month, making checking available to 400,000 of its most active customers – ones who make frequent deposits and withdrawals in their online savings accounts. Kuhlmann said he hopes that in Electric Orange’s first year, half a million customers will sign up.

You won’t find information regarding Electric Orange on their open an account page just yet. It’ll be available in Feb. 1, 2007. You have to be “special” to be able to sign up right now. Until now, I didn’t even know I was “special”. Anyway, I applaud ING Direct for finally doing something right.

I’ve always wondered why checking accounts have little to no interest, when savings accounts can have such high interest rates. The only difference I can see is that there’s limited number of withdrawals and transfers for savings accounts and checking accounts are allowed to be linked with external sources. I don’t think ING Direct provides checks for these checking accounts, but you get a routing number and you can use it to pay bills. You can also have them write checks out for you.

The current interest rates for ING Direct checking is:

If your balance is:
$0-$49,999.99 – 2.96% APR / 3.00% APY
$50,000.00-$99,999.99 – 4.94% APR / 5.05% APY
$100,000.00 or more – 5.18% APR / 5.30% APY

Do note, it’s the same interest rate for your entire balance. Not tiered off like what many banks do. I quote: For example, if your balance is $55,000, you earn a great 5.05% APY on the entire balance.

Personally, I don’t see myself having over $50k inside a checking or even savings account. If I have that much, I’d rather invest it, but even at 3%, it’s much better than my 0% at Bank of America. In fact, it’s infinitely many times better. ;p Since I keep about 2x my monthly mortgage payments in there, that’s an extra $150 every year. Not bad.

However, the coolest part is that transfers between your ING savings account and ING checking account are instantaneous, which I’ve confirmed with an ING customer service rep. That means you can keep all your money in the higher 4.5% APY interest rate account and only transfer the amount you need into your checking at 3% APY. I was planning to do this with HSBC, where I have all my money in the 5.05% APY savings account, and when I needed it, transfer it instantaneously into my HSBC checking account. However, I didn’t ever really get enough motivation to open a new checking account with HSBC, since there was no other benefit that I could see. So I’ve been sticking with the 3 day transfers from HSBC to Bank of America for awhile, and never really had much problems with it. I actually think transfers between HSBC and Bank of America has shortened to between 1 and 2 days, though I’m not certain. The last few times I initiated a transfer occurred rather quickly.

They do have ATM support. I should be receiving my debit card sometime soon, though I hardly ever think I’d need to withdraw money from those accounts. I’ll still keep aside some cash inside my Bank of America account just for cash withdrawal purposes.

Anyway, I hope to start seeing more high interest rate checking accounts now that ING Direct has started to lead the way. I’ve already reconfigured all my credit cards and mortgage payments to withdraw from this new account, so everything’s pretty much set. If you want to open a ING Direct account and want a referral to start with a $25 bonus, feel free to email me your first and last name and your email address to ingreferral@krunk4ever.com leave a comment and I’ll get back to you asap. I’ve already blocked the email address as it was starting to get spammed.