What's That?

You've seen the commercials a thousand times. Somebody is sitting on a white park bench, the orange "ING" logo is to their left, and someone else walks by and asks, "what's that?" The person sitting starts telling them about ING's various financial services, but the inquiry is actually referring to some surreal event taking place behind the bench.

I'm a big fan of ING's online "Orange Direct" savings account. Each month we have some money transferred over to it and we use it as rainy-day/travel account. There are no fees and we can get at our money within 24 to 48 hours if need-be. I just received an email from them letting me know that they've once again upped the interest rate (APY), this time to 4.00%.

Is that good? Let's take a look at what our brick & mortar bank, Bank of America, is currently offering.

BoA Money Market Account - 0.75% APY with a balance over $100,000. It's only 0.40% if you have < $2,500 in the account and then they charge you a $10 per month service charge which, by the way, is far greater than the interest you'll earn.

BoA Fixed-Term CDs - Give them a set amount of money and wait for the term to expire in order to regain access to it without suffering a penalty. Want to know how much you'd have to give them and for how long in order to earn the 4.00% APY that ING gives you on a normal FREE savings account? You'd have to give Bank of America a minimum of $50,000 for at least two years in order to be eligible for a 3.80% APY.

I remember not too many years ago there was this big concern over how the Internet was going to destroy brick & mortar retailers and how the sky was going to fall and so on and so forth. Well, as far as banks are concerned, I say good riddance. Just as I rarely use my land line anymore (I have it for DSL), I look forward to the day when all banking can be done not only online, but with a bank that only exists online. Great service and 10x the interest? Sign me up.

Oh, wait, I already am.