I needed to send my brother’s bank acct $$$ via their eCheck service, and my only advice is to make sure the recipient gives you the right routing and account numbers…. He read them off his checks, and they weren’t right, the numbers had changed! I called ING Direct’s customer service, and the rep instantly realized he had the wrong account number for his bank (too short, needed some leading zeroes). But once I got the right numbers from him (from his statement, not the old checks…), the transfer was pretty quick.

I don’t have the right ATMs nearby, but the local grocery store gives cash back on debit card transactions, which is good enough for my simple needs (I only have to pay the kid who mows the lawn with cash…).

I also needed to get a voided check to set up a link between Emigrant Direct savings and Electric Orange checking, and that worked very well just printing out the voided check from the Orange site.

So my box of checks from my local bank should be a lifetime supply now!

Here we go with the first round of Free Money Finance March Madness (if you wonder what’s going on in these posts, see my article announcing March Madness and/or click on my March Madness category link and scroll down to…

If you read ING’s Terms and Conditions for EO, they (as at other banks) state:

For legal and accounting purposes, your EO is broken-down into two subaccounts (one savings account and one checking account, both of which earn interest at the same rate). However, these subaccounts are treated as a single master account – a checking with interest account – and as such, you won’t have direct access to them.

(Emphasis added is mine)

No where does it say you will not get interest after 6 transfers – in fact it explicitly says that they get the same rate.

To answer why banks might do this, 6 transfers out per month is the Federal Reserve’s “Regulation D” limit allowed for an account classified as savings account. If you exceed this more than a few times (or even technically possibly once), the bank is not allowed to classify your bank account as a “savings” account.

However, with savings accounts, it is presumed that you are not removing your money on a regular basis, and hence the amount in the savings account likely(?) can be presumed to actually be there for purposes of determining the sum of all deposits the bank has available to back its lending.

So arguably and without knowing much, this might be a way to semi-artificially inflate the amount of money an institution has on record as savings deposits so they look more financially sound, and can lend more. As said though this seems to be something everyone does; google “interest checking” and “subaccounts” to find a whole bunch of banks that do this.

Personally, I don’t like ING’s “voided check”; it is always the same sequence number, and kind of obviously a fake

1. Contrary to the comments above, there is no limit on transactions with ING’s checking account. Quoting from the Electric Orange FAQ:

Is there a limit on the number of transactions (deposits or withdrawals) I can do in a month?
No. You can do as many transactions – card purchases, transfers, payments, deposits, etc. – as you like. This is different than the rule for the Orange Savings Account, which has a limit of 6 withdrawals per month.

2. Regarding eChecks and bank routing and account numbers:

I’ve already sent an eCheck. They work like a charm. There shouldn’t be a problem with getting bank routing and account numbers…except an irrational fear on the part of consumers that something unsavory can be done with those numbers. Everytime you write a check to someone you’re handing them your routing and account number (they’re printed right there on the check!). Everytime you leave your checkbook sitting on a table, you’re leaving your routing and account number lying around. Telling someone your routing and account number is as safe as handing him (or him handing you) a check. Normal checking isn’t safe because there is hidden information on checks. Checking in general is only safe because banks and legislatures have put measures in place to detect fraud and correct errors when unauthorized payments are made. So, people should feel totally safe with giving you their routing and account number to pay them…at least, if they would trust you enough to write you a check.

3. A feature that I would really like to see added to Electric Orange is remote check deposit. A lot of banks are doing this now (big example: USAA). They let you scan indorsed checks at home to deposit them in your account, then you shred the check. With this feature, the electric orange account would complete the electric banking circle.

me: Thanks for answering the question for me. But I don’t see why this practice helps for “accounting purposes.” To me, it seems they are trying to limit the use of the interest-bearing checking account. If you use it a lot, you lose the interest. If you don’t use it much, you get less interests than what you could get from a true savings account.

Read the fine print – under the covers it’s structured as a no-interest checking account plus a 3% savings account. at the begining of the month, everything is in the savings account. the first 5 transactions have the proper amount transferred from savings to checking. the 6th transfers the entire balance out of the 3% savings account.

joe: Wachovia Bank does the exact same thing with my interest checking and money market accounts with them, regardless of the fact both currently get less than 1% interest. Even after the transfer limit is reached, I still get paid interest – note it says that you only deal the main account, but they split into two for “accounting purposes”.

It’s apparently a common internal thing among banks, whatever legal skirmish or advantage it gives them.

If your employer requires a voided check for direct deposit, you can print one off of the ING website. After you logon to ING direct, click on the orange arrow by your electric orange account (not the Electric Orange Tab) then click on “Account Maintenance” on the next screen. You can print out a copy of a voided check to use with your payroll department. There is also a direct deposit form you can print off.

There are a couple of interface enchancements I’ve recommended e.g. there doesn’t seem to be a way to get a history of bill payments by vendor. There seems to be a bug in that all bill pays show up as going EFT when scheduled. If the payment actually goes out by paper check a little check icon shows up in the transaction history by the item and a lightening bolt shows up if going EFT. Another helpful item would be to show the check/lightening bolt icon by the vendor name before the payment is scheduled. These are minor issues to me.

While the above changes would be helpful, the interest rate and convenience of the Orange Savings Account offset the issues for me.