ING Direct's Savings Account Now 4.35% - Lagging Continues

ING Direct raised the yield on its Orange Savings Account today from 4.25% to 4.35% APY. I thought ING may do a 0.25% bump to match yesterday's Fed funds rate hike and get somewhat close to its competition. But as usual, ING just did a minor bump-up. It has been exactly one month ago since ING raised the savings account from 4.15% to 4.25%.

The only savings product that was competitive since ING's Winter Save Up Sale ended in April was its 5.25% APY 1-year CD. When this 5.25% 12-month CD came out on April 29th, it was only about 0.05% under the top 1-year CD rates. However, ING's 1-year CD rate remained at 5.25% which is now about 0.35% under the top 1-year CD rates. The only changes since then has been the extension of this rate to all of its longer term CDs.

The 4.35% APY puts the Orange Savings Account 0.45% under that of both HSBC and EmigrantDirect. It also puts ING 0.70% under the top no-minimum savings account (5.05% APY from Amboy Direct). Below is ING's rate track record compared to HSBC and EmigrantDirect over the last year:

How Much ING Direct has lagged:
              HSBC     Emigrant
05/31/05      0.00     0.25
06/30/05      0.00     0.25
07/31/05      0.10     0.35
08/31/05      0.20     0.20
09/30/05      0.35     0.60
10/31/05      0.35     0.60
11/30/05      0.50     0.50
12/31/05      0.45     0.20
01/31/06      1.00     0.45
02/28/06      1.00     0.45
03/31/06      0.80     0.50
04/30/06      0.80     0.50
05/31/06      0.40     0.40
06/30/06      0.70     0.45

This is the amount of APY that ING's savings account rate has lagged compared to the savings account rate of HSBC and EmigrantDirect. For example, 0.45 is the difference between HSBC's 4.80% and ING's 4.35%. Note this includes HSBC Direct's promo rate from the end of January through April. However, it doesn't include ING's 4.75% promo rate since this was only for new deposits.

Thanks to the commenters who mentioned this rate update.

[Edit 6/30: Updated the table to reflect today's rate hike at HSBC]