ING Direct To Offer Paper Checks To Electric Orange Customers
Update 8/13/2011: Paper checks are now available from ING Direct. Please refer to my ING Direct paper checks news for more details.
ING Direct will finally allow Electric Orange checking customers to write paper checks. According to an ING Direct rep, this will be publicly launched on Wednesday, July 27, 2011. You'll be able to order the checks when you're logged into your ING Direct account. I was told there will be a charge for the order, $5 for a book of 50 paper checks. And they won't allow you to buy checks from a third party. This is apparently due to security. They have a security process that will require you to activate the checks when you receive them in the mail. On the plus side, there are no fees or limitations for using the paper checks.
Thanks to the reader cumulus who first mentioned this news in the discussion forum.
Even with the fee for buying the checks, I think this is a good move by ING Direct. The fee is fair in my opinion. For the vast majority of transactions, you should be able to avoid paper checks by using online bill pay, debit cards and ING Direct's Person2Person Payment system. The paper checks will come in handy for the few occasions when a paper check is required. Sometimes it may not be required, but the person that you need to pay is just more comfortable with an old fashion paper check. With the EO account, you always had the option to mail a check from the online account. However, for someone expecting an old fashion paper check, this can still be confusing.
Reason Behind The Change?
My guess is that it's a response to Ally Bank's Interest Checking Account. For many people the lack of paper checks is a deal killer for a checking account. In my paper check poll from last year, only 4% of 67 readers said they never write paper checks.
I doubt the pending acquisition of ING Direct by Capital One had any effect on this. The acquisition announcement was only 6 weeks ago.
Ally Bank will still have the advantage in that they offer free checks. However, nothing is free. There's cost in printing the checks, mailing them and processing them. That cost will eat into the interest they pay. Perhaps ING Direct decided to charge for checks so that the price will pay for the extra overhead. For those who just write a couple of checks per month, this cost will be minimal.
Other Future Changes
I also asked the ING Direct rep if we can expect any other changes. I was told that remote deposit capture is scheduled to be launched before the end of August. This will allow ING Direct customers to scan checks at home and deposit them online without having to mail in the checks. Unlike Ally which introduced their remote deposit to certain customers, ING Direct's remote deposit should be available to all customers. I first reported on ING Direct plans for remote deposit last March.
Comparison to Other Internet Checking Accounts
With paper checks and remote deposit capture, it will become much easier to use ING Direct's Electric Orange account as your primary checking account and eliminate any need for a local bank. With all the changes at both ING Direct and at Ally Bank, I'm going to have to update my comparison of Ally and ING Direct checking accounts. I still give the edge to Ally Bank. For those with large balances, ING Direct EO offers the best interest rate (1.15% APY for $100K+ as of 7/25/11).
In February, I reviewed the best internet checking accounts that offer paper checks. One interesting thing to note is that Capital One Direct Banking offers the first order of checks for free. For those worried about the addition of fees with Capital One taking over, this is an example where ING Direct has more fees than Capital One.
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