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Update on ING Direct Merger into Capital One


It has been over 7 months since Capital One first announced its acquisition of ING Direct. When it was announced, Capital One said it had planned to close the deal in late 2011 or early in 2012. It might be taking longer than expected due to the extra regulator scrutiny of the acquisition that was sparked by concerns of Capital One growing from the 8th largest U.S. bank to the 5th largest.

An update on its plans for ING Direct and its HSBC credit card business was released last week in Capital One's Q4 earnings release. Here's an excerpt:

The company expects to close the acquisition of ING Direct in the first quarter and the acquisition of the HSBC US Card business in the second quarter, and expects that the acquisitions will have significant impact on reported results, especially in 2012, from the purchase accounting effects, integration expenses and partial year impacts of these acquisitions.

As you can see, Capital One is warning about the integration expenses impacting 2012 results. According to this NYT article, Capital One "badly missing estimates" in its Q4 earnings, and it blamed some of this to "efforts gearing up for the takeovers".

It appears that the planned ING Direct integration and its costs might be impacting Capital One Direct and its deposit rates. When the ING Direct acquisition was first announced in June 2011, Capital One's InterestPlus Online Savings Account had a yield of 1.10%. This has fallen to 0.70% APY. That's a 36% decline in 7 months.

There have been fewer rate cuts at ING Direct. ING Direct's Orange Savings Account yield has fallen, but not as much as Capital One's InterestPlus Savings yield. In the last 7 months, the Orange yield has fallen from 1.00% to 0.80%.

ING Direct does seem to be dragging its feet on some new features. One in particular is remote deposit capture in which you can deposit checks online. It was almost a year ago when I was told that ING Direct was "working on it". Their FAQ still says "it’s in the works."

ING Direct continues to offer new-account and refer-a-friend bonuses. A $50 bonus for its Electric Orange checking account is on its front page. I last reviewed this bonus in my August ING Direct EO review. The bonus and requirements appear to be the same. It will be interesting to see if the new ING Direct after the merger into Capital One completes will continue these bonuses. In previous years it made sense for new customers to wait for Independence Day and Black Friday after Thanksgiving to open an Electric Orange account when the new-account bonus has been over $100. It will be interesting to see if those promotions will continue.

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  |     |   Comment #1
Sad.  I was a long time IngDirect customer but as soon as this came to light, I closed everything I had with them and moved my money elsewhere.  I will never do business with Capital One ever again under any circumstances.  Oh well, Ing was good while it lasted.
  |     |   Comment #2
I am going to stick with ING at least until the merger is complete. If the changes happen and are significant, I will close my account with them. If they're trivial enough, then I will remain a customer. I've not yet experienced any bad things from Capital One.

I DO like ING's bill pay feature. So easy to do yet a real hassle to use my other accounts' bill pay, should I decide to move all my bills to one of those. Time will tell.
  |     |   Comment #3
Jo, I have opened a bunch of checking accounts for bonuses, and this experience suggests that the ING billpay is of the least impressive variety, on par with WF. It is tedious to add a bill because the biller database is emptier than others', and the payments take two business days longer to reach the biller than they do with some competition. I am curious who your still more inferior billpay is with. 
  |     |   Comment #4
I hate capital one with a passion.

Over a late fee for a payment that was not late, that they just SAT ON.

But, Im going to stick with ING until I see the first hint of capital one and Im gone too.

That bank has created more badwill than probably any other.
  |     |   Comment #5
I've pulled almost all of my money out of ING: I've taken my Electric Orange account (which I used as a liquid savings account since it had a better rate than the Orange Savings) down just to the daily ATM max.


It gives me the best of all the worlds for the moment:  I get great access to tons of free ATMs (Allpoint) while I also can state that almost all of my savings are no longer with ING/Cap1.

Money Tips
  |     |   Comment #6
Yes I would also wait and watch. Until I do not get affected I will not close my account. I loved ING though.
  |     |   Comment #7
CapitalOne is paying 1.01% on their High Yield Checking..Try that , Not even ING paid that.. Best deal so far and did I mention that the rate is garantee for one year. Before bashing COF, please do your homework!
  |     |   Comment #8
Suppose the CapOne/ING Direct merger is completed and a person has $200K in CDs at each.  Is FDIC coverage then limited to $250K out of the $400K total?  Or would the $400K total be insured until the CDs mature?  What if the $200K at each was in money market accounts rather than CDs?
  |     |   Comment #9
Waiting for the remote deposit feature is driving me crazy. Over a year with no progress updates? Super annoying. But I will say that (so far) it's been my only complaint about ING over the 3 years I've had an account.
  |     |   Comment #10
i absolutely have loved ing... i have absolutely hated cap 1. they are really the worst bank.  charged fees,  pulled a lot of credit card  misrepresentation,  and really played dirty tricks.. they are ruthless. the commercial with  the  vikings in hot pursuit, is actually very  representative of cap 1's treatment of customers.. when the merger is complete, i will most likely leave ing.. i do not trust cap 1  at all...
  |     |   Comment #11
I hate Capital One too. that's so sad Cap One bought ING direct.  I wish it were the other way around.  Well I can move my money easily from my ING account to HSBC direct.  The problem is that I have sharebuilder account too.  i don't know what other bank or broker can do the same thing like automatic investment.  sad sad sad...

btw, I love ING cafe.  i hope it will be more ING cafe everywhere in US.  too many starbucks.


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