Please don’t change ING Direct. Customers have stuck with the online bank (and put up with the company’s blinding trademark bright orange colors) because setting up an account is easy, the interface and bill-paying features are sensible, the absence of fees and minimum balance requirements is remarkable compared to the competition, and the fact that both savings and checking accounts pay actual interest — a pathetic 1 percent or so lately. But it’s sure better than nothing, which is what the typical brick-and-mortar bank pays.
Now that Capital One has bought ING Direct USA for $9 billion, here’s a plea on the behalf of all ING Direct customers who have long gotten a kick out of the way the company’s marketing mocks other banks for being fee crazy and nickel and diming customers: Please don’t turn ING Direct into just another bank that the old ING Direct would’ve made fun of.
ING Direct pays 4.5% on a savings account, while the average account gives 0.46%, according to Bankrate.com Then there is the fast-food aesthetic: simple, inexpensive service. ING Direct offers exactly one type of savings account and one type of checking account. There are no fees and no minimum balances.
4.5% in a savings account!?! Wow, that sure has changed. An ING Direct savings account now allows customers to earn a 1% APY, and as mentioned previously, that’s much better than average today. While the interest rates have dipped dramatically since the recession changed everything we’d assumed about the economy and investing, much of what attracted early customers to ING Direct has remained the same.
A 2009 Consumer Reports roundup that factored in fees and interest rates, among other data, gave ING Direct the highest ranking of all the online banking options.
More recently, as banks have steadily piled on fees and customers have grown increasingly disgusted with those fees, ING Direct has stepped up its efforts to bash the fee-crazed banks. A month ago, the bank’s blog, We the Savers, posted a list of fees—some real, some made up. The joke, which obviously helps to paint ING Direct in a better light compared to the competition, is that it was difficult for the average person to tell which fees are fake, and which fees are actually charged by some banks. The real fees include things like a “photocopier fee” and a “research fee,” while many the ones not (yet) charged sometimes sound like they could be real, such as an “after-hours banking fee” and an “account review fee.” As the post aptly puts it regarding the fees, no matter if they’re real or made up:
Either way, they’re all pretty ridiculous.
A WSJ story announcing Cap One’s purchase points out that, so far, ING Direct customers have been a surprisingly loyal bunch:
ING Direct is one of the largest and most successful online deposit gatherers, with $82 billion of deposits and seven million customers that proved more loyal to the online bank than banking analysts and consultants expected when Internet banking emerged as a stand-alone banking strategy just over 10 years ago.
Why have customers been loyal? It’s not that complicated. Consumers respond well to companies that do what they promise and don’t try to screw them over left and right.
Now, with Capital One buying ING Direct, customers are understandably worried the mocking tone, and more importantly, the no-nonsense service, decent interest rates, and reluctance to charge fees may be goners. Readers at The Consumerist reacted to the news with comments like:
I am pulling out my deposits as I read this.
I’m going to stay with them until they make changes, then bail for a local credit union.
The assumption, of course, is that they will make changes that customers won’t like. Will they? Maybe. In theory, Capital One’s whole “No Hassles” concept should be a good match for ING Direct’s existing hassle-free banking options. Capital One credit cards have long been a favorite among travelers, who love that the cards don’t tack on the extra currency exchange fees assessed by nearly every other piece of plastic on the planet. But a quick glance at any online credit card forum will reveal that many Capital One customers aren’t happy with their credit issuer—which is renowned for jacking up rates and charging mysterious penalty fees.
So, if ING Direct turns into just another bank with customer un-friendly requirements and fees, where should a consumer turn? Ally Bank, another online bank that has no minimum balance requirements, offers free bill pay, and pays decent interest—and which, interestingly enough, looked like it was going to buy ING Direct—is one option to consider. You might also “bail for a local credit union,” as that commenter suggests. Small banks and credit unions creamed the big banks in recent customer satisfaction surveys, and the fee structures definitely played a part in the results.