ING Direct Increases CD Rates

ING Direct increased interest rates on most of its CDs today. The largest increase was made to the 6-month term. It went from 3.75% to 4.00% APY. The other increases ranged from 0.05% to 0.15%. Below is a listing of the new and old rates:

CD Term   APY
6 month   4.00% (up from 3.75%)
9 month   4.15% (up from 4.00%)
12 month  4.25% (up from 4.20%)
18 month  4.40% 
24 month  4.65% (up from 4.50%)
30 month  4.70% (up from 4.65%)
36 month  4.70% (up from 4.65%)
48 month  4.75% (up from 4.70%)
60 month  4.85% (up from 4.80%)

So for those who don't want to change to EmigrantDirect or other online banks offering 4% savings accounts, you can get the same 4% rate with a 6-month CD. Of course you lock up your money for 6 months. Plus, you won't benefit from rising interest rates until the 6-month term is over.

Lately, it seems ING Direct has put more focus on its CDs rather than its savings account. ING Direct does make it very easy to buy CDs. It can easily be done online from funds in your Orange Savings Account or linked checking accounts. Also, there's no minimum deposit requirements. When you open a CD, they send you the official CD document in the mail.

Having many small CDs is better than one big CD. That way if you do need money, you don't have to break the one big CD which will cost you an early withdrawal penalty. Instead, just break one or a few of the small CDs for the amount that you need and leave the others untouched. Opening multiple CDs could be a hassle if paper applications and separate checks are required. With ING Direct, this can be done easily online.