Bucks Blog: ING Direct Drops Rate on Its Savings Account

The foreseeable future may already be here, it seems.

ING Direct dropped the rate paid on its Orange savings account from 1 percent annual percentage yield to 0.9 percent as of Oct. 21, according to the online bank’s Web site.

It’s true that interest rates are low, and that the fine print on the Orange savings disclosure does say that ING Direct “may change the interest rate for your account at any time.”

But it’s also true that in response to customer outrage over Capital One’s proposed acquisition of ING Direct, a Capital One spokeswoman said in June: “We have no plans to make any significant changes. ING customers should expect the same great customer experience and the `status quo’ from ING for the foreseeable future.”

Another Capital One spokeswoman said in an e-mail on Monday, “The ING deal has not closed yet … you’ll have to check in with them on their rate moves.” (The acquisition is awaiting approval by the Federal Reserve).

“Our rates remain competitive,” said an ING Direct spokeswoman, Cathy MacFarlane. “Although they fluctuate, our commitment to saving our customers time and money does not.” She referred questions about the reason for the rate change to ING Direct’s Dutch parent, the ING Group. We’ve asked it for comment and will update the post accordingly once it responds.

The move may not bode well for ING Direct savings account customers. Some of ING Direct’s online competitors, like American Express, Sallie Mae and Discover, are still offering savings rates of 1 percent A.P.Y.

Capital One, ING Direct’s prospective new parent, is offering 0.85 percent on its savings account, though you can earn bonus interest in each quarter if you maintain a balance of $10,000 or more.

Do you think ING Direct’s reduction of its interest rate, which equates to a 10 percent drop, is reasonable?

Article source: http://feeds.nytimes.com/click.phdo?i=bd0f1165495574e89862437a1158b000