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ING Direct Electric Orange Interest Rate Drops to 0.5% APY!

This article was written by in Banking. 17 comments.


For those who have enjoyed high-yield savings and checking accounts, get ready for a difficult time keeping up with inflation. ING Direct announced just minutes ago that the bank is dropping the interest rate on the first $50,000 per person deposited in their Electric Orange checking account to 0.5% APY. The interest rate is based on tiers, if your balance is above $50,000 and under $100,000 you will earn 2.85% APY and if your balance is above $100,000 you will earn 3.05% APY. I don’t know anyone who would keep that much in a checking account when a savings account earns more and balances can be easily transferred to the checking account if needed. Most people will be earning the 0.5%.

From one point of view, customers can be thankful they’re earning any interest in a checking account. This latest change is a 67% drop in interest rates, and it’s hard to justify calling this account a “high-yield” checking account at this point.

With the target federal funds rate now between 0% and 0.25%, I expect savers will increasingly struggle to find good liquid investments.

Updated December 19, 2008 and originally published December 17, 2008. 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.

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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 .

{ 8 comments… read them below or add one }

avatar William

For now, at least, it’s easy enough to keep up with inflation:

http://www.bls.gov/news.release/cpi.nr0.htm

As long as prices keep going down, ANY interest is a winning bet! And like you said – any relatively safe investment is increasingly hard to find.

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avatar waterMARK

Thanks for the heads up. Unfortunately I’m a bit shy of the $50,000 tier. I’m accepting donations.

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avatar vilkri

As I was commenting in yesterday’s post, banks seem to have plenty of cash these days. There are just sitting on it. They probably don’t trust their own abilities to find worthy lenders now.

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avatar castocreations

I don’t have the checking account but I do have the savings. I hope their savings amounts don’t drop too low. It’s so nice to see the interest amounts compared to my credit union savings.

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avatar Sara

Darn it! This is going to make it even harder to get takers on my ING referral links… I’ve shared a few, though

btw, Flexo, I’m eagerly awaiting your accepting those again…

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avatar Luke Landes ♦127,435 (Platinum)

Sara: Referral links posted on Consumerism Commentary are being used more slowly, but I may need more in a few weeks.

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avatar gt

hmm, this is not correct. if your balance is above 50k, lets say 50001, your entire balance earns 2.85%, not just the $1

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avatar Luke Landes ♦127,435 (Platinum)

gt: That’s right, I edited the post to clarify.

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