ING Direct: Interest Compounded Daily/Monthly?

[henrybemis]

Hi All,
To everyone with an ING Direct orange savings account. How often is the interest on money compounded and added to account. I'm thinking about getting an orange savings account to put the money from my huge change jar.

Thanks,

Henry Bemis

[terry1156]

I believe it is daily...have to check to make sure. I know the annual percentage rate is up to 2.25% and expect it may go a bit higher after the last fed shoert term interest rake hike. Great place to keep your change jar money.

[coffeebreak]

Originally Posted by henrybemis

Hi All,
To everyone with an ING Direct orange savings account. How often is the interest on money compounded and added to account. I'm thinking about getting an orange savings account to put the money from my huge change jar.

Thanks,

Henry Bemis

ING Direct's Method:
-------------------------
How do you calculate the interest on my account?

Interest on your savings account is accrued daily, compounded monthly and credited to your available balance at the end of each month.


Emigrant Direct's Method:
--------------------------------
How do you calculate the interest?

Interest on the American Dream Savings Account is compounded daily and credited monthly. For more details, see our Account Disclosure.

[34saving]

Looks like Emigrant has a better compounding method too. Really quick calculation (IE, I could be wrong) shows Emigrant effective yield is 3.045% while ING's is 2.631% Hmmm . . . more to ponder.

[coffeebreak]

Originally Posted by 34saving

Looks like Emigrant has a better compounding method too. Really quick calculation (IE, I could be wrong) shows Emigrant effective yield is 3.045% while ING's is 2.631% Hmmm . . . more to ponder.

ING and Emigrant both use what they call an Annual Percentage Yield (APY) to state what you will earn, so it's 3% after compounding, not 3.045%. Same thing with ING; 2.6% not 2.631%.

Emigrant's actual percentage rate is 2.96% with an APY of 3%. ING's is probably something like 2.565%.

It would be nice if the banking laws would say that you can only advertise percentage rates in one way; either APR or APY.

[Armywife]

By the way, has anyone been watching the daily savings rate fluctuations of Capital One savings accounts at http://www.capitalone.com? Mannnn I opened the account early last month at 2.60% and right now it's clocking in at 2.90%? Geeeez!

[bluek9]

Yep, I noticed that CapOne increase as well. Emigrant states in their FAQ's that 3% is guaranteed for 2005 UNLESS, & I'm paraphrasing, COMPETITION OR MARKET CONDITIONS CHANGE.

My point is, now that CapOne is approaching E.D. % territory, E.D. has got to start looking behind them. Yes, someone IS always gaining on you. E.D. is still safe but with not as much road between them & the competion any more. The "mistro" Greenspan is expected to raise short term's again on 3/22. Stay tuned. This savings rate battle is just heating up for these banks.

[Armywife]

Originally Posted by bluek9

The "mistro" Greenspan is expected to raise short term's again on 3/22. Stay tuned. This savings rate battle is just heating up for these banks.

That's the best news i've heard all night!! Boy am I glad I didn't lock into my CD yet hehehe Thanks for the heads up

[Tree0164]

Also the local banks are starting to offer higher rates as well. I think they are see alot of people put their money into the internet based banks and need to compete. I have heard several local banks mention a 3% rate.

[bluek9]

For good CD's check out CountryWide ( countrywide.com ) . They seem to always be the leader. Though it might pay to wait until after the 3/22 Fed hike decision.

[goodtosave]

Capital One and ED outsources their websites to Metavante Corp. You will see that both URLs point to ibanking-services.com. ING Direct is still have the better and easier to use website.

[PRICEPLUS]

Thanks for the heads up.

[genchan]

Can someone explain this a little better to me? If the rate is compounded daily and credited monthly, does this mean that if I take money out in the middle of the month before it has been credited, I don't get credit for that month's interest?

[PennyPincher]

I'm not certain, but I'll provide a response just based on my experience, and assuming you still left money in the account after your withdrawal... (my disclaimer)

Let's say you had $20,000 in your account at the start of the month. (aaaahhh, lovely) You take out $15,000 on the 15th. You should earn a full month's interest on the $5,000 left, and 1/2 month's interest on the $15,000 that was withdrawn, since it had accrued interest.

So, if the interest rate is 3%, I would imagine you would earn:

monthly interest on the $5,000: $12.50 (5,000 * .03 / 12 months)

monthly interest on the $15,000: $18.75 (15,000 *.03 /12 months/2)

Total monthly interest: $31.25

Banks may likely reserve the right to not pay the interest earn on money withdrawn during the month, that's why I recommend to check w/your bank ~