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Thinking About Moving Savings From ING Direct to HSBC Direct?

by Flexo on July 11, 2006

in Saving

ING Direct has served me well for a long time. For a few years, their interest rates were the highest available, and their sign-up and referral bonuses simply added to the gains. I used all available referral bonuses in 2005, so I no longer have these to distribute. Also, their interest rates have been sagging for many months now.

HSBC Direct has consistently been at the top of of the list, and I’m considering moving my cash. HSBC Direct and ING Direct calculate their interest similarly, making the comparison easy. Both banks accrue interest daily and compound monthly. Regardless, the advertised APY provides a means to easily calculate potential interest income, rather than using a complex interest calculation.

Right now, HSBC Direct’s APY is 5.05% and ING Direct’s is 4.35%. There is a 0.7 percentage point differential between the two rates. With my $12,040 currently in ING Direct stavings accounts, the 0.7 point difference, assuming I neither deposit nor withdraw money, results in an advantage of $84.29. It would be more realistic to assuming I will save more than I will spend from this account, so that interest advantage will increase slightly.

Unfortunately, HSBC is not offering any bonuses right now to sweeten the deal.

But the choice to switch isn’t obvious. Is ING Direct’s ability to maintain “subaccounts” (I can separate my ING Direct into separate baskets of funds with different titles for my own edification) worth the $84.29 I’d miss my not changing banks? Probably not, but it is handy.

Currently, my ING Direct account is split into different pools for my emergency savings, car fund, relocation fund, vacation fund, and money earned with my online businesses. I’m not excited about the prospect of combining all of this into one pool of money. I once heard the suggestion of combining the money at the bank but maintaining a split in my money software, but this would disable Quicken’s online banking reconciliation features.

Some people may also be interested in HSBC Direct’s offer of an ATM card for use with their savings account. I most likely would not use this feature as I don’t know of any HSBC ATMs in my area, and I won’t pay the fee for using their card at an ATM owned by someone other than HSBC.

I will probably make the shift. ING Direct has made me happy, and I like the company’s “personality,” but they’re simply not being competitive enough. Over the past year, HSBC Direct has proved itself a worthy competitor.

Update: Here is my decision.

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About the Author

Flexo, the owner and creator of Consumerism Commentary, has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow him on Twitter.

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  • Kim
    Why don't you split it up? I keep my emergency fund at HSBC and keep my "sinking funds" or "freedom accounts" or whatever the gurus are calling them (for me they're car insurance and moving fund) at ING.
  • Michael
    I do the same thing - keep accounts at several of the no-minimum high-interest rate online banks, and typically use the accounts for different things (car savings, holiday savings, whatever). When the interest rates end up with a large disparity, I shuffle which account is for what so that the largest balances get the best rates.
  • Katie
    While I agree their rates are less than HSBC, their customer service is definitely superior and I think it's much more user-friendly.

    Have you heard about the new paperless checking they're coming out with soon? Should be pretty sweet. No fees on their end and a lot of ATMs are free now. It will probably have bill pay too.

    [Editor's note: In the interest of full disclosure, this comment was posted from an IP address owned by ingdirect.com.]
  • I wouldn't leave ING Direct completely behind, and I'm interested to see what features they introduce.
  • Chris
    I too had been thinking of switching from ING Direct to HSBC Direct, for the same reason. I had decided to make up my mind at the end of this month since I didn't want to forefeit my monthly interest pay out from ING on July 31 should I decide to move my money elsewhere.

    But now, after seeing the deceitful, no disclosure marketing message from "Katie" above, I've just made up my mind. Buh bye ING.

    If "Katie" would like to post an apology from the same IP address (as verified by Flexo), maybe I'll reconsider. But I don't do business with dishonest businesses. I'll vote with my feet and my wallet.
  • Creepy on the ING IP address post.

    I wish HSBC had a referral bonus to sweeten the deal, but I'm going to start an account there anyway. I probably will shift a large chunk of my savings there, but I will continue to keep ING as well since I have CD's opened there already.

    It's not that I hate ING or anything like that, I'm really glad I have been with them. It's purely about interest. If they were within a half percent, I probably wouldn't switch, but now that they are at 0.7%, I feel it's time to make a move. It's not a huge amount of interest, but why should I keep my money at ING when I could make more at HSBC?
  • Hank
    I am in the same boat. Anyone know of any other internet-only banks out there?
  • Dan
    I'm holding onto my ING and ED accounts with small balances just in case their rates return to former glory. I'm now doing most of my banking with Presidential.

    Currently:
    Online Savings: 5.12%, no minimum (but $5k to open)
    Online Checking: 4.5%, $1000 minimum, bill pay, higher interest than ING's current savings account so you'd have to think it would beat ING's future checking account, right?

    There's a hard credit check to open, but DC-area residents can avoid that by opening at one of their branches.

    And unlike Katie above, I'm actually just a happy rate-chasing customer :)
  • Joe
    How do you setup the sub-accounts? I've looked all over the site and can't figure it out. Maybe "Kate" can help me out and show me some of that fine customer service?
  • HSBC has great customer service! From day one, when the rep called me to walk me through how to use the site, I was impressed.

    And no, I'm not posting from an HSBC ip! :)

    About the subaccounts...Flexo are you just opening up new accounts while you're logged in? I can't find anything about sub-accounts besides that.
  • Once you are logged in, just click ING Direct's big "Open an account" orange on the left hand side of the page. You'll choose either your current ING Direct account(s) or your external linked accounts for the initial funding.

    Note... ING Direct calls these ING Direct subaccounts "accounts," but the FDIC insures up to only $100,000 total... not $100,000 per subaccount. You really only have one account with ING Direct. (...Unless you also have a joint account, in which case you have two.)
  • HSBC seems to be offering a promotional $25 gift card for signing up for the online savings account.

    http://www.hsbcdirect.com/1/2/bestbuy
  • I've been thinking about doing the same - switching over, that is. With ING not keeping up with rates, it's tempting, since rates are so abominably low anyway.

    I like my subgroups, though. And I worry about a debit card attached (I know it's not required, of course), it would make it too easy to get to my money!

    So...still thinking. Maybe I'll take some of the advice above and split them. Thanks for the overview.
  • Max
    I've been able to establish sub-accounts with HSBC in much the same way you can with ING. You have to go through the whole application process again from start to finish. I've since also added a checking account (to get a bonus), but it serves as another option for accessing emergency funds since online transfers between HSBC accounts are instant. Customer service has been good as far as I'm concerned.
  • I haven't used ING, but HSBC's website is horrible. Multiple logins for money transfers, terrible structure, and very strict rules for passwords. Ugh.
  • Bob
    HSBCDirect has some sort of connection to Household Finance. If you Google "household finance", you'll see
    http://www.consumeraffairs.com/finance/househol...
  • mooncusser
    I've been considering a switch to HSBC since my brother told me about his account. I won't leave ING completely, but the big account will be moving if I take the plunge.

    BTW, I agree the "Katie" message is a bit less than honest, but I think it might be a case of enthusiastic employee acting on their own and not a corporate marketing message.
  • Tim
    HSBC has horrible web site. Too much security crap. Makes life very hard to do anything online. They haven't mail me gift cards they promised in promotion even after two months. You can't import statements directly from Microsoft Money directly even though Microsft web site says HSBC allows it. Too many problems with HSBC.
  • KevinS
    I know this is about HSBC Direct and ING, but has anyone looked into Citi's e-Savings account or the E-Trade bank? It looks like both have competitive rates.

    Is the only comparison between HSBC and ING, or should we broaden the scope here?
  • Carol
    I'm from Canada and have therefore been using http://www.hsbcedirect.ca rather than the .com US site. The interest rates of ING Direct and HSBC Direct seem fairly on par at 3.5% right now. By any chance does anyone know the history of rates with ING or HSBC in Canada oppose to the US?
  • Carol
    Apologies for the above typo… the url I’m using is http://www.hsbcdirect.ca
  • Archetypical
    Been using HSBC for a while with 2 online savings accounts and a new bill-pay checking account.

    Tim -- I have no problems with MS Money, just make sure you enter your account login, password, and security key in ALL CAPS. When they process it on the website they send it all to upper-case during validation.
  • devendelano
    FNBODIRECT.COM had a 6% promo, now it's going down to it's 'normal' of 5.25%. kicks all others asses! plus now has atm cards, with no machines; and credit cards with 2% cash back. top that!
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