More on ING Electric Orange from Readers’ Feedbacks

Back in November 2006, I wrote a review of ING’s Electric Orange checking account. Since then, I have received some feedbacks from readers who have used this account and their first-hand experience more valuable than what I said from outside. Personally, I didn’t use the account because I don’t know what exactly I can get from it, though it offers some very nice features. I am not looking for the 3.0% APY it offers as I only have several thousands in my checking account. Plus, switching dozens accounts that link to my Bank of America checking account to ING is just too much for me. So at least for now, I don’t see the needs to get into the Orange.

From readers comments, the main issues so far seem to focus on the interest rate of the checking account (or whether it’s checking account or savings account, or both) and the eCheck (that’s why it’s call Paperless checking account) service. However, since I don’t use the account, I can’t comment on them myself. If anybody can confirm whether the 3.0% interest rate can still be earned after 6 transactions in one month, that would be great.

Anyway, following are what I summarized from readers’ comments with their names. Thank You all for sharing your experience with us!

Paper check

Paper check is really part of the bill pay function. ING will debit your account for the amount specified and sent a paper check to the recipient. You can not use paper checks, even if you buy them from a supplier, with this account. — Jeff

eCheck

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. Every time you write a check to someone you’re handing them your routing and account number (they’re printed right there on the check!). Every time 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. — mew

Billpay function

Sent a bill pay to myself. The payments are processed through Metavante. ING deducts the amount from your account at check issuance and cuts the check on a corporate account. This is good for those who track their balances online (you can forget about those checks you’ve sent and have not been cashed) but bad for those who try to float all of the interest in the account they can. Debit card arrived promptly. — Jeff

Direct deposit

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. — Jeff

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

Checking or savings

It doesn’t pay 3% like it says. 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. Basically – it’s 3% interest until your 6th use of the card every month – then it’s 0% It’s great for occasional use/ emergency. It’s not so great for a primary account. — Joe

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.

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. — me

Other issues

There are a couple of interface enhancements 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.

If you have used Citibanks eSavings account you know that their web site has a lot of functionality and options. ING is taking the opposite approach. Very simple and clean to use. Not a lot of options but the simplicity makes up for it. Very intuitive to use. — Jeff

I signed up for electric orange last week and it is the coolest account ever, no more need for regular checking accounts, no need for savings accounts, no need for credit cards and no need for cd’s, it’s all in one. And I sent a check to myself the other day to see what it looks like, I’m guessing by the looks on the site that it is very professional looking. — Peter

I recently switched to an ING Direct electric orange account. So far, I think it’s a great thing. 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. — mew

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4 Responses to “More on ING Electric Orange from Readers’ Feedbacks”

  1. Me |  Feb 17, 2007 at 8:03 pm

    OK; so far I’ve done 6 transfers this month out of my ING checking of various types. Since my Electric Orange account balance was low so far this month because I’m still a tad uncertain how much I want to use it (average no bank in a legal sense has an “interest checking” account; what you are seeing is a lot of trickery by a lot of banks to make these products work.

    If they really did not pay interest the entire month though, I bet banks would have a lot of highly annoyed, otherwise highly profitable customers, as interest checking accounts are typically aimed towards the more wealthy with minimum daily balance limits, etc.

    (A similar but off topic issue is that a lot of people feel that privately insured Credit Unions are less secure than NCUA (their FDIC equivalent) insured credit unions and won’t even touch them, even though the private insurers have to maintain a higher level of reserves on hand than the NCUA, can provide higher levels of coverage than NCUA, and are completely legal for state-chartered credit unions to use.

    I’ve seen a few state-chartered credit unions who were paying extra to get deposits insured beyond NCUA’s level drop this coverage, not because they couldn’t afford the supplemental/alternative insurance (if done in addition or alongside NCUA is up to them), but because they were actually *losing* deposits because people were scared that they were “not federally insured”, and simply not using them.)

  2. Jon |  Feb 18, 2007 at 8:35 am

    The actual terms and conditions 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). ”

    So, you WILL continue to earn the same interest rate throughout the month.

  3. The Sun |  Feb 19, 2007 at 10:59 pm

    It would be interesting to see how exactly ING pays interests to the checking account as from what people are saying now, it seems a little confusing whether they will pay interest once 6 transfers are made. If they really use the checking-savings combination structure, I won’t be surprised if no interests will be earned after 6 transfers.

    Regarding the credit unions, if I were using any one, I probably will go with FDIC insured CU at least they sounds safer than those only provide private insurance, though it doesn’t mean they are not safe. The rewards (interest rates) need to a lot higher to get people take the risk with them.