ING Direct vs Emigrant Direct Bank

[Triggerfish]

Originally Posted by jeffrey

For those who would like a free $25, simply send your full name to info@savingadvice.com and we will send you an invitation right away. You must be a US citizen to qualify. .

US citizen or a just a legal US resident? Meaning us citizens and permanent legal immigrants. Just US citizens seem a bit odd.

[jeffrey]

My mistake...US resident

[crosses]

How much is convenience worth? I find the Emigrant website difficult to use compared to the ING website so I just feel more comfortable with my money in ING.

[goodtosave]

I have accounts with both Emigrant Direct and ING Direct. In spite of the startup time, I like Emigrant because of the higher rates and transfer time. With ING direct, I just experienced losing 2 days of interest. I entered my transfer on Friday, the transaction was posted on Monday, my funds was withdrawn from ING Direct on Monday and only deposited to my checking account on Wednesday. I talked to a rep. yesterday and he was aware of the problem and blamed it on the ACH company that ING Direct uses. The point is you could lose up to 2 days of interest EVERY TIME you make a transfer with ING Direct. ING Direct claims that beginning and end of month are bad times to do transfers. So much for Internet banking if they can blame it on the ACH which can't handle the number of transfers from ING Direct.

With Emigrant Direct, you can get you funds the next business day if you enter the transfer before 3:30EST on the current business day.

NO LOST INTEREST.

[genchan]

Here is a question. Does the ease of use that ING provides make up for the slightly lower interest rate they pay? More and more of my friends are refusing to go after the highest rate because they like the ease of use of ING.

[mom-from-missouri]

"slightly lower interest rate"?? Its not lower for me--my local bank currently pays 1.25% on a savings account. ING pays more than that....

[genchan]

Originally Posted by mom-from-missouri

"slightly lower interest rate"?? Its not lower for me--my local bank currently pays 1.25% on a savings account. ING pays more than that....

I was referring to other Internet banks like emigrant which is currently paying 3.5% versus 3.15% ING is paying.

[baselle]

This is a quick calculation, but the $ difference between 3.5% and 3.15%, with interest calculated and compounded yearly (ING is calculated daily and compounded monthly, not sure about Emigrant Direct) is ....

for $1000, difference is $3.50/yr; for $3000, $10.50/yr; $5000, $17.50/yr; $10,000, $35.00/yr.

This is the reason why those ING bonuses are so powerful. Every $10 ING bonus is worth about $3000 difference in interest in Emigrant Direct; the $25 start up bonus is worth about $7100.

Now if you're putting in $100,000 the difference is meaningful ($350)...but frankly, if you've got $100,000 to slam into an internet bank, I can think of a bazillion other places to put it that get better interest, are safer, and are at least tax-deferred.

[34saving]

I don't have quite $100,000, but I'd be interested in any investment that's safer, bears higher interest, and is tax-deferred. Can you clue me in on a few of them?

[goodtosave]

I would also be interested in better than FDIC insured, safer, higher interest, and tax deferred. And also answering the question of liquidity(as in next day withdrawal) and ZERO RISK of losing capital/principal.

[Fern]

ING and Emigrant are by no means the only options available, and they don't rank among those offering the highest yields.

Check out bankrate.com and you can get a ranked listing of top money market/savings acct. yields. Note: MetLIfe currently offering 3.10%; the higher rate posted was a typo, their cust rep confirmed for me.

PS I wouldn't go with a bank that has less than a 4 star rating on this site.

[goodtosave]

I like good yields but most importanly is to make sure that they are FDIC insured. I would protect my capital first before worrying as much about the yield.

There's also other banks offering liquid CDs. Some will allow you to withdraw all after 2 weeks and some will require 5K until the end of term.

WAMU is offering 3.80% APY liquid CD. There's a 5K minimum and then you can only withdraw once a week. So it's a nice deal if you can live with the limitations.

Both Citibank and HSBC are now offering 3.25% APY. I am actually surprised that ING Direct has decided to let their rates lag.

[baselle]

I'm sorry, goodtosave - Liquidity is the first thing you will sacrifice for any of the solutions that I would talk about. Also ZERO risk is simply not possible - you can put your savings in a mattress, I guess, but then you have inflation to consider. You're asking for the holy grail of fixed income instruments. If you're happy with what you're getting w/ Emigrant Direct, go for it.

The other options that I was thinking about are savings bonds - while they are not liquid (you have to keep them in a year), an I-bond is currently yielding 4.80% and I think the EE bond is running 3.5%. Both are tax deferred (you pay only federal taxes on the interest when you redeem them or they mature); if you use them for educational purposes, no tax.

FDIC is wonderfully safe; a savings bond is backed by the full faith and credit of the US government. Believe what you will about the US government , if it goes, your savings bond is gonna be the least of your worries. TIPS (Treasury Inflation Protected Securities) also, but I don't know enough about them to explain them or recommend them.

[baselle]

Ah yes - I'll have to check out that WaMu CD - I bank there.
FYI I think WaMu has only a three star rating .

[goodtosave]

World Savings also came out with a similar 10 liquid CD paying 3.80% APY. World Savings liquid CD has no limit on withdrawals as long as you maintain a 5K min. deposit.

[jmjj215]

Originally Posted by goodtosave

World Savings also came out with a similar 10 liquid CD paying 3.80% APY. World Savings liquid CD has no limit on withdrawals as long as you maintain a 5K min. deposit.

And it's a CD?

[goodtosave]

FYI, do you know that with ING Direct you lose 1 to 2 day of interest everytime you move money whether in or out. I figure that's 10 cents for every $1000 you move. So if you move funds in and out frequently the 10 cents begin to add up real fast. ING Direct claims that's they way their ACH works. But that's not the case with Capital One and Emigrant Direct so far, your debit and credit transactions all take place the same day.

But I haven't seen many complaints and I wonder if most folks aren't even aware of it or they don't care losing 1 to 2 days of interest everytime they transfer funds.

[34saving]

Looks like ING just went to 3.3%

[goodtosave]

Originally Posted by jmjj215

And it's a CD?

WAMU and World Savings have 10 month Liquid CDs. It has a minimum deposit of around 5K depending on the bank. So if you put in 10K then you can withdrawals on that Liquid CD as long as you maintain the 5K minimum for the term of the liquid CD.

Bank of America has a 9 month risk free CD with the exception that you can withdraw ALL of it out before the 9 months. BOA may have higher minimum and their rates are not competitive at this time. They used to be a few months ago.

My information on these CDs is that their rates aren't continually competitive.

[jmjj215]

thanks for the info gts.