What Truly Matters to ING DIRECT Customers? Many Say Interest Rates

This February ING DIRECT will officially become Capital One 360. In an email to customers and in a blog post, Jim Kelly, the head of direct banking of Capital One 360, wished customers a happy new year and updated everyone on the transition. In addition, he listed the following 2012 highlights for ING DIRECT in terms of new features:

• Giving you access to over 40,000 fee-free ATMs: You still have access to 38,000 fee-free Allpoint® ATMs, plus now you can grab your money at 2,000 Capital One ATMs.
• Launching CheckMate: You asked for the ability to make mobile check deposits and we delivered CheckMate. And it turns out you really meant what you said – we’ve logged over 1.2 million CheckMate deposits (and counting).
• Getting rid of foreign transaction fees: Say goodbye, so long and see ya to foreign transaction fees – we won’t charge you for using your Debit Card outside the U.S.
• Unveiling My Savings Goals: Now you can set a savings goal and track it with this tool. On a side note, more than 15,000 of you shared what you’re saving for in our Savings Most Wanted promo. Every time I see your pictures and read your stories, I’m floored.

What I found more interesting were the comments in the blog post. Many customers said in the comments that the most important feature for them was the interest rate. Here's one from a commenter named "Frustrated Saver":

Jim, that's all very nice, but I joined ING a long time ago based upon the high interest rate for savings accounts. That is all that truely matters to me and probably alot of other savers. So, when is ING going to at least match Ally Bank's rate which currently is 0.95% apr?

This comment has received 166 likes as of this morning. It appears that Jim Kelly (or another ING DIRECT official named Jim) replied to several of the comments. I have to give ING DIRECT credit for reading and replying to many of these comments. Here is his reply to the interest rate complaints:

@ Kpyachtsman, @ The Man, @Pablum0734 – Rates are important, we get it. But we also know that our Savers have come to expect a terrific online experience, fee-free checking & savings, and ability to chat with real people. We’re working to bring you the best combination of value and experience out there, and we hope you’ll stick around to see us live up to that.

A commenter named "Mary" asked when they will have the ability to designate beneficiaries for the savings accounts. Her comment currently has 19 likes. Jim also had a reply for this:

@Mary, @Pymcat – While there’s no way to designate a formal beneficiary on your savings account, you do have the option of registering your accounts in a Trust at http://helpcenter.ingdirect.co.... When you register your accounts, you’ll have the ability to designate beneficiaries. If we make any changes, we’ll be sure to let our Savers know.

I can understand why ING DIRECT may not want to be a rate leader, but I don't know why it can't allow customers to designate beneficiaries. Many have requested this feature for years.

Even though ING DIRECT has rarely been a rate leader, its savings account rates have been close to the average for internet savings accounts. Over the last year, it has been a little above the average that we've calculated for internet banks. However, this average has been pulled down by several internet banks that have pretty much given up on being competitive (i.e. HSBC, CNB Bank Direct, Charles Schwab Bank).

ING DIRECT's Electric Orange checking account has consistently offered rates up to 10 basis points higher than the savings account rate for large balances. These rates are competitive for internet checking accounts.

ING DIRECT savings and checking account rates could be better, but at least they have been fairly competitive. That's not the case for ING DIRECT CD rates. They are way below the rates offered by several other internet banks. For example, many of Discover Bank's and Ally Bank's CD rates are currently 2x to 3x the CD rates at ING DIRECT.