As featured in The Wall Street Journal, Money Magazine, and more!
     

ING Direct Becoming Capital One 360

This article was written by in Banking. 27 comments.


Earlier this year, Capital One’s acquisition of ING Direct was approved and finalized. Consumerism Commentary readers responded, for the most part, by stating they plan on closing their ING Direct accounts in protest. I preferred to wait and see.

The conflict and attitude arises from ING Direct’s history of being consumer friendly and on the forefront of internet technology. Although it wasn’t the first, ING Direct became one of the most popular online savings accounts due to its high interest rates on savings accounts and a vision of the future where bank branches are unnecessary in efficient. The cost savings helped the bank remain competitive, although in recent years, other banks surpassed ING Direct’s interest rates.

Nevertheless, the bank built a strong and loyal following, most of whom remained customers even as other banks began offering higher interest rates. The loyalty is being tested now as the bank’s acquirer, Capital One, has a more nuanced reputation. Capital One has been a brand associated mostly with credit cards, and for many years, customers have reported less than stellar experiences with this company’s support team. There is the impression that Capital One catered to card holders with lower than average credit, and used their increased demand for credit to push through rates and terms unfriendly to consumers.

Since the recession, Capital One has been expanding its retail banking operations with savings and checking accounts, mainly through acquisitions of smaller banks. ING Direct’s acquisition is a big move, and customers are concerned that the approach Capital One has taken with its credit card customers will extend to customers of the former ING Direct.

Capital One is taking the next step with its acquisition by rebranding the company. Part of the acquisition called for the elimination of the ING brand, so the bank formerly known as ING Direct will soon be known as Capital One 360. By February 2013, the new bank name and logo will replace ING Direct’s familiar orange ball. Capital One announced this change in a “pledge” to customers, indicating the plan to continue offering no-fee, no-minimum checking and savings accounts, and “great rates.” The marketing message continues, focusing on the company’s commitment to its customers.

As a long time owner of an ING Direct, the acquisition by Capital One and now the rebranding is not enough evidence for me to move my money out of the bank. I’m not happy about the decreased competitiveness of interest rates, but I’ve mitigated that by opening accounts elsewhere. And for me, the purpose of savings is to have cash available in an emergency. Most of my financial assets are invested in stock or bond index funds, and that’s where I concern myself more with return on investment. I’m not concerned as much about savings rates because the purpose of savings is not growth, it’s protection.

Still, just about any high-yield savings account is better than the typical savings account you might find at your local bank branch.

What do you think of ING Direct’s rebranding? Will you continue to be a customer of Capital One 360?

Updated February 8, 2013 and originally published November 8, 2012. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

Email Email Print Print
avatar
Points: ♦127,465
Rank: Platinum
About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He 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 Luke Landes on Twitter. View all articles by .

{ 27 comments… read them below or add one }

avatar qixx ♦1,890 (Half-Dollar)

I have noticed that since the Capital One acquisition my interest rate has dropped 28% (from .9% to .85% to .7%). I have a feeling this is a foreshadow of future Capital One changes. While Capital One concerns me it is not enough to find a new bank or move my money yet. I’d say my level of concern is low, buy wary.

Reply to this comment

avatar Money Beagle

Capital One always had a pretty negative image and ING Direct was pretty positive, so I would have kept the ING Direct name for a while and not been in such a hurry to get rid of it. But banks don’t want to keep multiple names, so it’s not at all surprising. I don’t think I’ll make any withdrawls as a result of the name change, but I also would probably make less deposits in the future moving forward, as the allure has fallen a bit.

Reply to this comment

avatar Ceecee ♦53 (Newbie)

Rebranding doesn’t really matter to me—–the devil is in the details. I will see if the interest rate continues to drop and if it does, shop around. That’s what matters.

Reply to this comment

avatar Kevin @ Thousandaire

Like you said, savings accounts are for savings, not growth. Until the Fed makes some serious moves and allows savings accounts to get back above 2-3%, I’m not really worried. As long as I can move money in and out easily, I’m happy.

Reply to this comment

avatar Carrie Smith

I’ve been apprehensive about this whole acquisition since it was announced. I used to be a Capital One Bank fan and user, until I moved to a new city and switched. I never had any complaints with them or their service, but they definitely don’t compare to ING Direct’s service or products.

My savings has been with ING for almost 6 years and I’m curious as to whether this merger is going to be a positive or negative. For now, though, I’m staying put and riding this out. I can always move my account to a different bank if I’m not happy.

Reply to this comment

avatar Aaron

It seems that people’s negative images of Capital One derive from their experiences with the credit card side of things, and I can’t speak to that because I have never had a Capital One credit card. However, I have been a checking customer of theirs for over a year now and I have to say that I have been really pleased on all fronts. Every time I go to a physical branch, the people there are extremely friendly and helpful. Technologically, they’ve never been at the forefront or anything, but they do a good job only lagging behind the leaders by a small amount. They have a good, user-friendly app for example, and their envelope-less deposit works quite well. I also had a money market account until really recently and they were prompt to close it when I requested it through online correspondence, they do answer questions quickly and then gave me a customer satisfaction survey on the experience immediately after. The reason I did close the account though is that the rate had been dropping a bit. So I would suggest that if the rate is what drives your satisfaction, then you should probably switch (I moved to Ally, for example), but if it’s customer service I don’t have a single negative thing to say.

Reply to this comment

avatar jim

I don’t like the new name and logo. Sounds like they’re turning into some sort of sporting goods store.

I’ve been happy with ING for a long time. I’ll take a ‘wait and see’ attitude with Capital one.

Reply to this comment

avatar wylerassociate ♦162 (Cent)

I don’t like it at all. I’m not a fan of capital one. I use Sharebuilder as my stock holdings account and I like their service so I’m begrudgingly going to stay with Capital One 360.

Reply to this comment

avatar Deb

I don’t like the name and I don’t like the logo. I too have been an ING for a long time. There’s a petition to save the logo or at least send a message to capital one that they better take a look. Did I say I don’t like the logo? Design matters and design is the message.
http://www.change.org/petitions/capital-one-keep-the-ing-direct-brand-and-save-the-orange-ball

I will likely look elsewhere to put my cash. Sorry to see ING sell its interest.

Reply to this comment

avatar Juggler314

Why value graphic design over function for a service product – it could look like poop, but if it works well that’s good enough for me (seriously, I’d carry around a CC with a turd on it if i liked the underlying services).

Very few people have been longer ING customers than myself (5 digit account number! and I bet a lot of the people who signed up way back when the first offered the account don’t still use it). And still I couldn’t care what it looks like so long as they still offer at least “fairly” competitive rates and let me create subaccounts on the fly.

Reply to this comment

avatar jim

I wouldn’t value the logo design over the service. But theres no good reason to have an ugly logo. Aesthetics matter. I wouldn’t leave them over that alone of course.

Reply to this comment

avatar Sharon V

If I remember correctly, they were forced to change the name and logo of the site by a certain date, or it would revert to ING. It’s not the most aestheticaly pleasing logo,but it is distinctly not ING.

Reply to this comment

avatar Sharon V

I’m also waiting to see if there are changes before I make any moves. I like it how it is, but if they start charging fees and changing services, I’m willing to switch.

avatar Juggler314

I’m somewhat annoyed at the way cap1 in slowly buying everything in my wallet. I only have a few cards, due to some credit problems many years ago. Recently cap1 bought HSBC credit cards – of which I had 2 in addition to an actual cap1 card. Now they buy ING where I keep all my “goal” oriented savings (that’s my main reason for sticking with ING so long, the ease of creating and destroying sub accounts).

In nearly 20 years of having various bank/credit accounts I have had only maybe 4 occasions to really get annoyed at any customer service/policy. I feel that if you understand them all it’s easy to avoid the issues most people complain about. To that end i don’t really care – i’m looking forward to hopefully having access to physical banks for my ING accounts – that would probably get me to stop using wells fargo as my main checking account (which i mostly do because that’s where my mortgage is and thus I get an uber-high end account for free there).

Reply to this comment

avatar Lance @ Money Life and More

I will be for now. If they change the services or add fees I’m gone though.

Reply to this comment

avatar Melissa@LittleHouseintheValley

I am actually not happy about the change and don’t expect good things to come from the change, but I will wait and see before I take any action.

Reply to this comment

avatar John Collins

Bye bye ING! Capital One is run by a bunch of inept people, so I will be switching. I’m shopping around right now.

Reply to this comment

avatar Andrew

Why not call it Capital One 360 Full Throttle 24/7/365?

Reply to this comment

avatar harm

I love the way you put that, Flexo.”….Capital One has a more nuanced reputation.”
rotfl…….

Reply to this comment

avatar Manette @ Barbara Friedberg Personal Finance

Sadly, Capital One does not have a good reputation to me. On the other hand, I only have good words for ING Direct. I hope that the acquisition will not ruin ING’s good reputation in the banking industry.

Reply to this comment

avatar Codsterdad

ING’s interest rates have never been amazing (no banks have) but just a place to keep money so it’s available. If I use my debit card out of the US I get nailed with a 2.5% fee. Not with my local Credit Union. I use it overseas all the time, get a good exchange rate and don’t pay any international transaction fee. I have been thinking about closing my INGDirect account before this and still may to consolidate to two banks. I also use Perkstreet and while there is not interest, if you use your debit card as a credit card you get cash back.

Reply to this comment

avatar Alex

As of November, ING Direct/Capital One 360 no longer charges a foreign transaction charge. The most you can be charged is a currency exchange fee instituted by Mastercard of .2% (two tenths of one percent) for purchases outside of the USA.

Reply to this comment

avatar Juggler314

Cap1, at least for credit cards, doesn’t charge a foreign transaction fee, so maybe that will be better for you.

Reply to this comment

avatar Ian

I have had online bank accounts with many of the online banks going back to at least 2005. The only bank that I have had a problem with is Capital One. This did not involve a credit card but an online saving account. The customer service was unresponsive and the result was a couple hundred dollar loss for me. Now, the rebranding of ING and lowering of the interest rate (when other banks have been keeping theirs stable, and several banks offer higher rates), is just enough to ask, why stay with Capital One 360? I can have money available for an emergency in another bank with a higher interest rate and better customer service. Is there a downside to moving now? If not, my money is moving this week.

Reply to this comment

avatar Mr. Pennywise

I will take a wait and see approach as well. I have business with Capital One through credit cards and a money market account. I have never had a problem with them, well, once regarding an APR change. I will see how the transition progresses before I close my account.

Reply to this comment

avatar Dominique Brown

In my opinion, their rebranding doesn’t really do anything for the company. I personally have had nothing but a great time with capitalone so I’m all for it.

Reply to this comment

avatar Jim

I have been a Capital One credit card holder and ING Direct customer for many years and have had no problems at all with either company. The two CapOne credit cards I have offer me no transaction fee purchase checks that allow me to take short-term loans when I need funds to pay expenses and will have the money repaid within a max of 55 days (if the check posts the day after my billing cycle closes) with no interest or fees. They have been a life saver on more than one occasion over the last 10 years.

Savings rates are low everywhere and ING Direct is higher than most. I’ve seen some higher rates with American Express Personal Savings and Ally, but don’t feel the need to switch anyting at this time. Even Capital One Direct Banking has a slightly lower rate with a 10% quarterly bonus with a balance of $10K or more. I agree with a previous commentor that my main retirement savings is in stocks and bonds and I use my ING Direct account for short-term savings, setting goals to save for specific purchases, and building a 12 month expense savings account so I have the money to pay my expenses in the event I lose my job or have any health problems that would cause me to take a LOA from work and supplement any LTD or STD funds.

As for the logo, I wasn’t excited with it, but under the purchase agreement with ING Capital One can only use the ING Direct name for 12 months and Feb 2013 is the end of that time, so they are forced to change the name. This is a very common.

I never believe there is a reason to panic and move money from bank to bank. A wait and see attitude is best and with FDIC insurance you are safe.

Reply to this comment

Leave a Comment

Connect with Facebook

Note: Use your name or a unique handle, not the name of a website or business. No deep links or business URLs are allowed. Spam, including promotional linking to a company website, will be deleted. By submitting your comment you are agreeing to these terms and conditions.

Notify me of followup comments via e-mail. You can also subscribe without commenting.

Previous post:

Next post: