ING DIRECT - Wilmington, DE Review

For several years I have been hearing ominous reports indicating that most Americans aren't serious enough about saving money.  From my own experience, I knew this to be true and I wanted to do better.  So, on October 23, 2005, I set up the best Money Market savings account I could afford at Charter One (the bank where I have my checking account).  I figured that it would be nice to have a back-up account, just in case ...

As a control measure ... and to diversify what I hoped would eventually become my holdings ... I also opened up a regular savings account with ING.  On that same day and almost that same hour, I revved up both accounts and set them to running with a base deposit of $100 in Charter One and only $50 in ING.  I set up automatic deposits of $200 monthly to Charter One and $50 a month to ING.  All I really had to do after that (aside from making sure the money for the deposits was in my checking account, of course) was to sit back and observe.  Here is what happened ...

Actual interest rates varied from time to time but Charter One got the lion's share of deposits in the intervening months.  Aside from an occasional few extra dollars tossed into  the ING cage now and then, they ended up with less of my money to work with.  So it is not surprising that the Charter One account now totals more than $5,200 while ING is making do with about $3000.  Here's the surprising part:  in the same amount of time, Charter One has paid me less than $20 in interest on the use of all that money while ING has coughed up $137.36 already!

Now we know the answer to why most Americans aren't saving enough -- that's easy, most Americans aren't saving enough in traditional savings accounts because most Americans aren't stupid.  Places like Charter One blithely assume that we aren't going to be really interested in the interest we are earning and I must admit that -- had it not been for the comparison with my concurrently running ING account -- I probably would have just accepted what I earned from Charter One as just one of those things and the best I could do. 

What I'm going to do next may come as a surprise ... I've decided to just leave the money in the Charter One savings account where it is.  Despite their abominable lack of interest, Charter One is a fine bank in many ways AND they own the ATM machine at 7-11 which makes it possible for me to withdraw money without paying a lot in ATM fees.  Just because they pay lousy interest doesn't mean that they aren't a stable, dependable place to have checking and back-up savings accounts ... but I am not a total sap and in the future will vote with my dollars on this issue. 

From now on, I will deposit exactly one dollar a year in my Charter One savings account -- just enough to keep the account active -- and will plough everything else into ING.  Probably, Charter One will never even notice but if they do, I guess they are just going to have to accept the fact that that's just one of those things.