ING Direct for Emergency Fund?

[rduell]

I am thinking of opening an ING Direct account after reading about them here on this board. I was wondering if they would be a good place to keep my Emergency Fund? I am working to get my EF to the minimum $1,000. It was there and then the engine in my van seized up, so the money quickly evaporated.

I have $350 right now that I could deposit into it. It is currenly sitting in our savings account at our local bank and is making 1.25%.

Is this money liquid enough that I can use it if (when) another emergency comes up? What is the experience of those that have taken advantage of this type of opportunity?

[autoxer]

That's where I keep my EF. It takes a couple days to transfer the money back to my checking account, but that is accessible enough for me. The rate chasers will recommend other banks, because Ing offers 4.4% while other online banks offer >5%.

[poundwise]

I don't think you have to be a 'rate chaser' to recommend a higher interest account to someone looking for an online savings. If I had an ING account as was very satisfied with it, I would keep it. However, if someone doesn't have an account yet, exactly why shouldn't they consider other offerings when ING's rate is at 4.40% APY and there are a dozen or so offering 5.00% upwards to 5.50%?

rduell, I think ING is a fine place for your money. However, you may want to check out some others before deciding where to open your account. Click the link in my signature for a list.

[PRICEPLUS]

I agree with Poundwise. If you are starting out with an EF you are well served by investigating your options!

[rduell]

Thanks for the information. I will look into these before deciding what to do.

[project15]

My EF is in ING Direct. If I have an emergency that costs more than I have in my checking account, I put it on the credit card and then transfer the EF cash to my checking account so I can pay it off in full on the next statement.

[Broken Arrow]

I third Poundwise's advice.

Right now, my exact emergency fund set up consists of a small amount of cash stashed away at home, and the the rest in a savings account. The best of both worlds I think.

[rduell]

I guess my next question would be how easy it is to add money to the account? I assume you can just do an online transfer?

[poundwise]

Yes. When you open an account you will create a link between your online savings and another account - typically your checking account - and then you can transfer money back and forth.

Based on the amount you have to start with and the fact that you are new to this type of online account, I would recommend Amboy to you. They are paying 5.25% APY and have a simple opening process and easy to use, if spartan, web site interface for handling your account. I helped my parents set up an account with Amboy and they are very happy with it. Here is a link:

Amboy Direct: Premium Savings

If you decide instead to go ahead and open an ING Direct savings account, don't forget to utilize one of the links on this forum in order to gain a $25 new account bonus. While ING is only paying 4.40%, they certainly have a fine web interface and you shouldn't have any problems with them either, so the bonus is nice. Here is a link to that information:

SavingAdvice.com: ING Bonus Links

Overall, my suggestion would be to go with Amboy. The better rate is significant in my view. Still, I don't think you'll be disappointed with either.

[rduell]

Thank you very much! I am going to check into both and hopefully make a decision soon.

[rduell]

We decided to go with Amboy. In about 10 minutes I had the account all set up and am now waiting to confirm. Thanks very much, Poundwise!

[Ima saver]

I keep my emergency fund locally so I can get to it quickly. However, it is paying me 5.25% so I do not have to sacrifice any interest to stay local.

[disneysteve]

Originally Posted by Ima saver

I keep my emergency fund locally so I can get to it quickly.

I think everyone needs to think about what would actually constitute an "emergency" that would require tapping their emergency fund. To me, the EF is NOT for things that require instant access. For those types of things, I keep a modest amount of cash on hand and have credit cards. A sudden car repair, home repair, etc. could be covered with either of those. A medical emergency wouldn't generally result in an immediate bill but rather one to be paid at some later date.

My EF is primarily to cover a situation involving loss of income for an extended period. In 2000, I left my old job and was unemployed for 3 months. I paid bills and living expenses out of my EF (and ebay sales ). That didn't require quick access. I kept the money in my money market. I wrote checks to pay large bills (mortgage, student loans, credit cards, etc.) and I transferred funds into my regular checking account to pay smaller bills. (Money market checks must be for at least $500.)

I think folks often misconstrue an EF as something that you need instant access to (which is part of why I dislike the term emergency fund). I'd much rather call it a contingency fund - money set aside to draw on over time if my income were to stop suddenly.

This is just my routine. Yours may differ depending on your overall financial situation.