ING Direct Electric Orange Raising Credit and Margin Rates

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Last updated on April 20, 2017 Views: 547 Comments: 16

On May 16, ING Direct will change the rate is uses to determine the cost of overdrawing the Electric Orange checking account.

ING Direct’s overdraft system is a little like Passover, where we ask how this bank is different than all other banks. Rather than charging an overdraft fee if you send an electronic check or other electronic payment that exceeds your balance like most other banks, ING Direct extends a small line of credit and charges you interest for its use. The amount of interest is based on what ING Direct calculates as a prime rate plus a margin.

That margin has been, and will continue to be until May 16, a rate of 4%. Added to the ING Direct Prime rate, the total interest charged for using the line of credit feature of Electric Orange has been 7.25%. That margin rate will increase to 8% on May 16, and when added to the updated ING Direct Prime rate, will result in a total interest rate of 11.25%. ING Direct’s terms allow for this rate to be variable. In fact, ING Direct can increase the margin up to 12% without changing the terms for all customers. I expect, since that condition is currently allowed, for ING Direct to follow through and increase that margin some time in the future. Meanwhile, current customers of the Electric Orange checking account who use the line of credit should be aware that they will be charged more beginning May 16. As of 10.21.11 the ING Direct savings rate is 0.90% APY and the checking rates are 0.20% – 1.10% APY.

Even with this increase, this line of credit is a better deal than most overdraft protection terms offered by other banks. Rather than a fee of $25 to $35 per overdraft, you could be paying less than a dollar if your use of ING Direct’s line of credit is temporary.

For those who would rather have their transactions rejected than dip into a line of credit, the bank allows customers to cancel their overdraft coverage by calling 1-888-464-0727.

Do you use ING Direct’s line of credit? I used it once, when a deposit I scheduled was unavailable before a scheduled payment hit my Electric Orange account. I owed the bank just pennies for the protection, but I try to be more careful when scheduling my deposits and withdrawals.

Article comments

lynn says:

I agree with SKYLOG on this one. I like to be able to access what is mine when I want to. An unseen amount of anything is not comfortable for me.

I agree the rates are better than most other banks offer.

skylog says:

the rates are still good, but i have not used the service, nor do i plan to. i will just try to make certain i do nothing that would require the need for it. that said, again, the rates are good and it seems to beat many other competing services.

Anonymous says:

I have an ING Direct Account because it feels more resonable than my Chase Bank account. This is a good example. I have maybe used this feature once maybe twice. I still try and avoid it but things can happen. You do not have to live in fear of this bank. For that reason I really only use my Chase account to cash checks and then move funds to ING. The day ING takes electronic deposits via apps, I am done with Chase.

Will @ says:

Wow, this is completely awesome. I’ve had overdraft fees hit me for $39 because I accidentally selected the wrong account when paying a CC. Then had a fee for the bounced payment. Overall, would have cost me about $70 but luckily I got both banks to reverse the fee. Still a ridiculous practice for the amount borrowed and the short-term nature of the overdraft. This is a much better solution. Absolutely love seeing banks work for their customers. This seems to be the opposite approach of Chase, which is attempting to squeeze every dime it can out of consumers.

The Latter-day Saver says:

I really like ING’s line of credit on their Electric Orange Checking accounts, because it means I can leave all of my money in my Orange Savings account earning interest and when I need to purchase something using the checking account (via my Debit card) I can transfer the funds from savings when I get home that evening and usually pay nothing in interest.

shellye says:

I also prefer automatic transfers from a savings account to cover overdrafts, but if I didn’t have those funds available, I’d say ING’s deal sounds much more reasonable than most banks’ overdraft fees.

rewards says:

I personally prefer automatic transfers from a savings account to cover overdrafts.

Anonymous says:

Any idea whether or not this is offered to everyone or if only approved people would be extended a line of credit? We had something similar at the bank I worked at, but the people needed to be approved first. Otherwise, people with bad intent or no self-control could easily rack up charges they’d never pay for.

Luke Landes says:

ING Direct performs a credit check to determine if you qualify for the line of credit that comes along with the Electric Orange account.

Anonymous says:

Those are still not bad rates, I’ve seen a lot worse. ING is great, while I can’t comment on HSBC or NFCU.

This is off-topic, but man I miss the high interest ING orange accounts during the early 2000’s!

Anonymous says:


I don’t think your longing for those rates are ever off topic! Ugh if I had what I had now with ING I’d be raking in the interest!

Anonymous says:

I think this rate is very reasonable for a small and temporary line of credit. HSBC are also very good at rate change notifications, good or bad. NFCU is not so good.

Ceecee says:

I haven’t used it yet, but I would. It is MUCH better than those big overdraft fees. On another ING note, have you noticed that you get a celebratory email if the orange savings account rate goes up, but if it goes down, you get nada…just a line on your month-end statement, which you could easily miss. Seems like they should have to inform you directly of a rate change.

tbork84 says:

One nice thing about FNBO Direct is that they do email you a notice if their rates go down or up. Not that a rate going down is a great thing to read about in an email, but you are right that it is nice to know.

Anonymous says:

Hey, I wonder if that means they can raise rates PAID to SAVERS, if only by
a similarly small amount…….?

Luke Landes says:

I wouldn’t bet on it…