Capital One 360 (Was ING DIRECT) Review
In 2012, Capital One bought ING DIRECT, the popular bank that conducted most of its operations online. The transaction took place in February of 2012, but the name change didn’t happen until November, when Capital One, N.A. and ING DIRECT legally became a single bank.
The bank remained ING DIRECT until February 1, 2013, when it became Capital One 360. The colors changed from orange to a red and blue motif to match Capital One, but for the most part, ING DIRECT customers should notice very few changes. Sign-in information, routing numbers, payments (on loans), and other items are all the same. In fact, I just logged in, and there really aren’t any discernible differences with accessing my accounts, even though it is now “officially” part of the Capital One banking family.
The main difference that will affect consumers is that now the FDIC coverage treats your ING DIRECT/CapOne 360 balance as part of Capital One. So, while you used to have a limit of $250,000 in coverage for balances at each bank, now that is combined, so you have a limit of $250,000 coverage total for all the money you have in Capital One accounts and ING DIRECT accounts. (See also: 7 Banks Still Offering Free Interest-Bearing Checking Accounts)
Brief History of ING DIRECT
ING Group is based in the Netherlands and provides a number of financial products and services. ING DIRECT USA was established to provide services to consumers in the United States. Over time, ING DIRECT went from just offering a savings account with a very attractive and competitive yield to offering a range of financial products, including CDs, kids savings, interest checking, mortgages, investing, retirement, and business banking.
However, as ING Group grew, and its subsidiary companies grew, it drew the ire of regulators in the European Union. In February 2012, ING DIRECT was sold to Capital One as part of an effort to appease regulators.
Even before the sale, though, ING DIRECT had been losing the edge in high yield savings accounts. Finance geeks loved the high yield accounts, as well as the fact that there were no minimums and no fees on opening accounts. The Sharebuilder investment account was also favored for some time, since it made it easy to start investing with dollar cost averaging. However, other competitors have stolen ING’s thunder, with higher yields on deposit accounts and discount brokerages offering lower-cost trades.
Now, with the switch to CapOne 360 coming up, there are questions about how much of ING DIRECT will remain, and whether Capital One will make changes. So far, Capital One appears to be planning to keep everything business as usual, but there are still questions about what’s coming in the future.
Features and Benefits of ING DIRECT/Capital One 360
For most people looking to centralize their banking and find competitive rates, it’s possible to use ING DIRECT/Capital One 360 as a viable option. Having everything in one place can also make it easier to instantly transfer your money, and ING DIRECT/Capital One 360 makes it easy to access all of your accounts, including your investment account, from your account summary.
Here are the products and services offered by ING DIRECT/Capital One 360:
This is the classic account that started it all. There are no fees, no minimum requirements, and no catches. Right now, the yield is 0.75%, which is reasonably competitive, especially when you consider that there are no minimums and no fees. It’s easy to link your account to other banks and set up automatic transfers to make saving easy.
Kids Savings Account
My son’s savings account at ING DIRECT/Capital One 360 offers the 0.75% yield that kicks the crap out of the 0.20% he was getting at the local credit union. It’s easy to monitor the account from your own dashboard and to teach your child the value of saving early on.
You can open a checking account with ING DIRECT/Capital One 360 and earn a yield on the balance. Current yields range from 0.19% to 0.84%, depending on how much money is in the account. You can get an ATM card that is now accepted at Capital One ATMs in addition to the free in-network ATMs previously available. (Note that ING DIRECT network ATMs are not on the same network as Capital One, so your Capital One debit card used at an ING DIRECT ATM will still incur fees.)
- This account has no fees and no minimums, and you can use P2P Payments to send money to family and friends for free.
- Bill pay is free, even when you have paper checks sent.
- You can use CheckMate to deposit checks remotely, and the account comes with overdraft protection.
- If you overdraw your account, you won’t end up paying a fee. Instead, you are just charged an interest fee (currently 11.25%) on the overdraft until it’s paid off.
The yields on the CDs from ING DIRECT/Capital One 360 are not as competitive as they could be, ranging from 0.40% to 0.90%. You can choose your term, and you can also choose when you want to receive your interest payments.
The Capital One 360 mortgage allows you to choose a 5/1 or a 7/1 ARM on a new purchase or a refinance. The closing costs are very straightforward, and right now the rates are quite low. You can also get a home equity loan with a variable rate starting at 4.0%, or lock in a slightly higher rate for 15 years.
The ING discount brokerage is part of Capital One now, too. You can invest in stocks, mutual funds, and ETFs, as well as trade options. There is no account minimum, and you can choose between paying a $12 monthly fee and getting a lower price on trades, or just opening the account with the Basic version. I have this version, in which regular purchases are $9.95 a transaction. However, since I have an automatic investment plan set up, I only pay $4 a transaction. It’s easy, straightforward, and the pricing is competitive with the automatic investing.
Note: ShareBuilder is currently offering a $100 bonus for new account. Click here to learn more.
You can choose to open a savings IRA, or you can use ShareBuilder to open an investment IRA. With the savings IRA, you have all the money in CDs and savings accounts; you need to go the ShareBuilder route if you want to invest in stocks, mutual funds, or ETFs. You can also rollover your 401(k) into an IRA from ING DIRECT/Capital One 360.
Capital One 360 also offers business banking products. You can open a business savings account, or a business CD. The current yield on the business savings account is lower than what you get with personal savings, though.
You can also use the ShareBuilder 401(k) to set up a retirement plan for your small business. It’s fairly easy to set up, and you can offer this benefit to your employees.
Overall, ING DIRECT/Capital One 360 promises to remain a viable competitor. The products offered remain fairly competitive. Additionally, the low-fee, low-hassle structure of the bank makes it easy to open accounts, and avoid watching your wealth erode due to hidden fees and complicated requirements.