> This is an interesting move, in that they're
> effectively rewarding those that have taken
> their business elsewhere, rather than bumping
> their regular rate to reward (and retain)
> current customers.

Well not really... What they're doing is giving both groups an incentive to increase savings. Existing customers are also eligible for the promo rate of 4.75% through April 15, 2006. It is for all new deposits, including those from existing customers.

Yes really. If you had all your money sitting in ING, you can't get the higher rate because you don't have any extra savings to deposit in the account.

Luckily for me I had moved all my money to Emigrant Direct to get the extra 0.2% over there. Since I have ING direct linked directly to Emigrant, I transferred it all back to ING. And on 4/16/2006 it will all go back to Emigrant.

For me this works out well and it doesn't help ING one bit. Because they will lose all that money again in less than 3 months and the whole point is to be able to loan stuff out at higher rates for longer terms so having my money for 3 months doesn't seem to do them much good.

I have no idea what the typical customer does so it may work for ING overall.

Speaking of which. I noticed I can no longer create electronic links to external accounts. Instead ING now requires you to mail a check. Did anyone else notice this? I suspect that they found people were linking to accounts like Emigrant Direct which makes it way to easy to transfer money between accounts with every change in rates and they don't want that so I suspect that is why they turned off the electronic linking. Clearly they built in the technology to do it so why did they take it away? Security? Could be, but I doubt it. I suspect they don't want to make it easy to transfer money out into a higher yielding account, only to your low yielding checking account.

What do others think?

> Yes really. If you had all your money sitting
> in ING, you can't get the higher rate because
> you don't have any extra savings to deposit in
> the account.

And this is ING's fault?... Honestly, I don't feel sorry for existing ING customers who had all of their money with ING at the start of their Winter Sale and hence can't take advantage of their 4.75% APY for new deposits. Anyone savvy enough to use online savings accounts to get the best APY should have been with Emigrant (4.0%) or with some other bank offering >3.8% instead of ING (3.8%) anyway. If a saver is really that into getting the best possible APY as often as possible, this wouldn't have even been an issue, as he wouldn't have been with ING at the start of their Winter Sale anyway.

> Luckily for me I had moved all my money to
> Emigrant Direct to get the extra 0.2% over
> there. Since I have ING direct linked directly
> to Emigrant, I transferred it all back to ING.
> And on 4/16/2006 it will all go back to
> Emigrant.

Exactly. And good for you for your diligence in monitoring all of the various offers. In my case, I was going to open an EmigrantDirect account for the first time on the night of the 19th, only to see ING announce their Winter Sale the same day. Lucky break for me; I went with ING instead. If they don't adjust their standard APY upward come 4/16/2006, I'll assess all of the current offers and see where to go next. There may be someone else willing to not only match ING's or Emigrant's APY but also pay me a $25 bonus to sign up. =) (I see HSBC Direct is now paying $25 for new accounts too.)

You seem to be criticizing ING for not rewarding their loyal customers, but then you admit to jumping ship yourself for an extra 0.2%. So my point is: what's the point of ING trying to attract highly transient, aggressive savers who are only going to jump ship the minute (literally) they get a better deal elsewhere? The more desirable customer is the one who can be enticed to move to ING and then stay there because an extra 0.2% doesn’t seem worth the effort to move again. Seems smart to me, and I suspect highly transient savers like yourself are in the minority. In fact, just being a saver at all puts you in a small minority in this country!

> For me this works out well and it doesn't help
> ING one bit. Because they will lose all that
> money again in less than 3 months and the whole
> point is to be able to loan stuff out at higher
> rates for longer terms so having my money for 3
> months doesn't seem to do them much good.

It helps ING just fine. I suspect most people succumb to inertia more than you and I do, and not everyone will jump ship at the end of the promo period. Hell, I bet most people are just happy to have escaped Bank of America's abysmal 0.5% APY (like I was!). And besides, the point of ING's Winter Sale is to bring in new money, both from new customers and from existing customers. Not everyone regularly plows *all* of their spare cash into savings accounts; my guess is most people do have cash elsewhere they can move to ING and collect the 4.75% promo rate.

You say come 4/16/2006 ING will lose your money. How do you know they won't adjust their standard APY at that time, matching or beating Emigrant's? It seems to me that competition between online savings banks is heating up, with banks regularly one-upping each other. With the Fed widely expected to raise rates again in a few days I'm sure we'll see lots more activity between now and 4/16.

If all of the online savings account offers were exactly the same what difference would it make which one you choose? Personally, I think ING's promo rate of 4.75% until 4/15/2006 with a $25 bonus for new accounts (of $250 or more) is the best deal running, and it distinguishes them from the crowd. You may be sore that they didn't just up their standard APY but no one forced people to park *all* of their cash at ING for 3.8% while other banks were offering higher rates, and ING doesn't exist solely to benefit you; they're in business to make money too. If anything, I'd be just as wary of Emigrant's decision to not pay a new customer bonus. Emigrant's at 4.25% now, but so is HSBC Direct and they've also matched ING's $25 bonus for new accounts.

> Speaking of which. I noticed I can no longer
> create electronic links to external accounts.
[snip]
> I suspect they don't want to make it easy to
> transfer money out into a higher yielding
> account, only to your low yielding checking
> account. What do others think?

My guess is the same as yours: they want to entice people to join ING but don't want to make things too easy for their competitors. I agree, that sucks for us, but it's just good business for ING.

I am not connected to ING in anyway way other than having just opened an account with them; I just think the criticism they are getting here is a little unfair.

I just wanted to add some news regarding internet banks - EmigrantDirect just boosted its savings account rate to 4.25%. Also, it now offers a reward card, that gives back 1.25% of all purchases, if you maintain a balance in the savings account of $10,000 or more. If the balance is less, you still earn .5%. The reward proceeds are deposited every six months into the account. Plus, there is a 0% balance transfer deal going on.

Is anyone planning on taking advantage of this? I've had an Emigrant account for a few weeks now, and have been very happy with it.

Chris,

The only point is that ING is only going to keep the lazy money. Maybe thats all they want and thats fine. Its just that they don't reward people for staying with them by playing short term rate games. Again, totally their call, if thats what they want to do. I have no problem with them doing whatever they want. I have no problem with them dropping their rate to 2% once they attract a bunch of new money. They can run their business anyway they want. Its just likely that as it continues to get easier to move money to higher yielding locations the people that will attract the most money will be those who consistently pay higher yields. Again, maybe that doesn't work for them because they need to pay lower yields to get the profit they want. I think you came away with the impression that I think ING is evil for doing this. Not at all. I am sure its a business decision on their part and they have decided it is not necessary to pay near the top in rates to keep enough customers to run their business so as a result they don't care about keeping you happy once they have you. Which is completely their right. But that doesn't change the fact that the original post and my response are correct. They are not rewarding existing customers and are rewarding those who left them as proven by my example. And they won't keep me with that strategy either. So they apparently believe they will keep enough other people to make it worth it for them to pay a high rate to keep my money, and I am sure many others, for 3 months before it leaves again.

Thats the only point.

D-Man: I think you're right that they took away the online linking option in order to make it harder to chase higher yields.

CPA1298: In my view, the Emigrant credit card is not a very good deal. 1.25% isn't all that high for a reward card (many Citi cards offer a split 5%/1% reward depending on what you buy) and the $10k balance is a pretty big deal... Dip below that and you lose 60% of your rewards!!!

What about Everbank with the 5.01% Checking Account for the first 3 months?

Let me just say that HSBC has been very aggressive in competing. They currently offer 4.80% through April 30th with $25 bonus for new accounts. Their standard rate is 4.25% - they were there before Emigrant or ING went there.

Perhaps this may be a dumb question, but does the frequent flip-flopping your money between banks have any effect on your credit score?

Initially your credit score and FICO take a hit for each query but once you've opened the account just leave it open with $1 in it and you should be good. Others have commented that the real problem seems to be with TeleChex and other Checking Bureaus - evidently if you open too many checking accounts you may be pegged as a possible fraud and be denied other checking accounts.