A reader pointed me to an article about high-yield online checking accounts. I’ve been following these stories with a little bit of “interest,” and I’ve already opened a new checking account at ING Direct. This article talks about some of the drawbacks of this account; namely the necessity of a “regular” checking account for transferring funds.
The article also mentioned that HSBC Direct will be introducing a new high-yield checking account by June 2007. I have savings accounts at both HSBC Direct and ING Direct, but I’ve found ING quite a bit easier to deal with for my particular needs. I don’t know that I will bother opening an HSBC Direct checking account when it is rolled out. An increasing number of financial institutions are seeing the benefit of high-yield accounts for attracting customers. This competition is damaging the leader in high-yield savings from 2002 and 2003, ING:
In 2006 ING Direct’s market share fell to 25% from 53% in 2005. Emigrant Direct’s market share fell to 12% from 22% to and Capital One from 10% to 8%. Seeing a rise in market share last year were HSBC Direct from 14% to 21%, Citibank from 2% to 19%, and Washington Mutual from 0% to 17%... [T]he banks that showed an improvement did so because of more aggressive marketing campaigns, and offering higher yields in 2006.
Will you consider opening this new checking account? What interest rate would make it worth while? For me, it would have to be significantly higher than ING Direct’s checking account, as long as it offers the same features.
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11:52 am (reply)
I currently use HSBC for savings but I won’t add checking for one solid reason: logging in is a pain in the butt. If I have to go through that virtual keyboard every time I have to pay a bill, managing my finances will be even more stressful than before.
1:55 pm (reply)
It’s going to be tough for me to drop the option of having a physical location for my checking account. It’s not an issue for my ING savings account (which also has a numeric virtual keyboard), but if I’m writing checks and running into issues I need to be able to get face to face with a representative.
5:35 pm (reply)
I’m not sure about the HSBC option. I actually have a Citi e-savings account with attached regular checking, and, oddly enough, that is answering all of my needs (everyone hates Citi, but I’ve had nothing but good experiences).
10:33 pm (reply)
I agree with anthony about that virtual keyboard. I wouldn’t mind it so much if HSBC supported direct connect… but the two combined is just too much. I currently have checking with Commerce bank and I earn no interest on it, but the convenience of a bank open extended hours 7 days a week that also gives me free direct connect well worth it.
3:27 am (reply)
I’ve been using Presidential.com’s high yield checking for years. I love their service, free billpay, ACH transfers, and currently 4.5% interest. I think they require a direct deposit and $1000 minimum though.
12:07 am (reply)
I would NEVER consider opening ANY account with ING no matter how simple or easy it is to apply for,due to their recent security lapses and losses of social security numbers. I would rather have to deal with extra log ins and security features with HSBC any time! PLUS, ING’s rates are much lower than HSBC’s. ING doesnt offer 24/7 customer service like HSBC does. I have dealt with many banks and financial institutions over the years, and i have found that by far HSBC is the BEST!!!
12:14 am (reply)
Brian: This is the first I’ve heard about security lapses at ING Direct. I’ve also had nothing but great customer service experiences with ING Direct.
HSBC Direct on the other hand is owned by the same company that offers Household Bank credit cards, which run the credit card programs for large retailers like Best Buy. I’ve had major problems, as had many, well documented, etc., with their practices.
I sent you an email asking for some facts about security breaches at ING Direct. If this is true, I’d certainly like to share with the readers.
12:39 am (reply)
The story of ING’s loss of social security numbers was a high profile story on all the news channels as well as national publications. Of course ING isnt going to tell you or other people anything, cause they dont want to lose coustomers. The lost information was on lap tops that were lost by employees of ING, the one was left in an airport terminal!
12:48 am (reply)
There have been many news stories about security breaches due to a stolen or lost laptop, but I don’t recall ING Direct ever being involved in these stories. So… please post a link to a story from a major publication.
Thanks!
1:54 am (reply)
Just so you guys know, the loss of SSN’s was true. However, it was an ING Financial Advisor that lost some information for some clients of his and of ING Financial Services. ING DIRECT, although a subsidiary of ING GROUP, much like ING Financial Services, is in no way connected, or has anything to do with the financial advisors. In short, ING DIRECT is probably the safest bank, OVERALL , in the marketplace.
11:01 am (reply)
Even more specifically, I think this was ING Retirement Plans, yet another division of ING. A hair splitting technicality, but not part of one of the ING Financial Advisor groups (although some articles use the term).
http://www.washingtonpost.com/wp-dyn/content/article/2006/06/17/AR2006061700966.html
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7B5EB7D976-2922-4E99-9F6E-B1F323A884FA%7D&siteid=yhoo
1:14 am (reply)
I had moved most of my money from ING direct to HSBC direct for about 18 months. And It was a good decision. Why would you want to stay with ING direct when you can get better yield at another bank.
Regarding the virtual keyboard of HSBC. I like it. It added another level of security to prevent key-logger.
To me the more security feature the better. After all It’s my money, I am talking about.
Today there are more banks giving 6% yield, I’m thinking about moving my money out of HSBC direct to make my money work harder for me me and me.
I’m thinking about FNBO and Everbank at
https://www.fnbodirect.com/01d/html/en/
http://www.everbank.com/lander/freenet/freenet/freenet.html?referId=12454
4:01 pm (reply)
@mike – update to FNBO – the new interest rate is 5.05%
Still good, but not the highest.
5:15 pm (reply)
I do not trust HSBC and have a low opinion of their ethics. They own several “credit card banks” who have predatory lending practices, preying on the poor, uneducated and elderly. I did have a savings account with HSBC Direct but closed it after extricating my retired mother (on SS, disabled and stroke survivor) from their clutches. Besides, EmigrantDirect has always met or beat their rate.