banking

Get educated on Capital One buying ING DIRECT and the changes associated with it from Wise Bread.

In 2012, Capital One bought ING DIRECT, the popular bank that conducted most of its operations online. The transaction took place in February of 2012, but the name change didn’t happen until November, when Capital One, N.A. and ING DIRECT legally became a single bank.

The bank remained ING DIRECT until February 1, 2013, when it became Capital One 360. The colors changed from orange to a red and blue motif to match Capital One, but for the most part, ING DIRECT customers should notice very few changes. Sign-in information, routing numbers, payments (on loans), and other items are all the same. In fact, I just logged in, and there really aren’t any discernible differences with accessing my accounts, even though it is now “officially” part of the Capital One banking family.

The main difference that will affect consumers is that now the FDIC coverage treats your ING DIRECT/Capital One 360 balance as part of Capital One. So, while you used to have a limit of $250,000 in coverage for balances at each bank, now that is combined, so you have a limit of $250,000 coverage total for all the money you have in Capital One accounts and ING DIRECT accounts.

RELATED: 7 Banks Still Offering Free Interest-Bearing Checking Accounts

Brief History of ING DIRECT

ING Group is based in the Netherlands and provides a number of financial products and services. ING DIRECT USA was established to provide services to consumers in the United States. Over time, ING DIRECT went from just offering a savings account with a very attractive and competitive yield to offering a range of financial products, including CDs, kids savings, interest checking, mortgages, investing, retirement, and business banking.

Read on for more.

Banking can get expensive, but avoid those pesky fees with these tips from Wise Bread.

In recent years, we’ve seen a lot about the rising costs associated with banking. Looking for ways to increase profits, banks are turning to fees at an increasing rate. Indeed, fees represent one of the major sources of revenue for many banks, and a recent survey from MoneyRates.com points out that fees are in fact on the rise.

Some fees, such as overdraft fees, are obvious, while others might be a bit sneaky. In any case, it’s important to pay attention to the terms and conditions of your account, and check your statements and communications from your bank for information about fees.

If you have any questions about fees related to your account, speak with a teller or other bank representative. In the meantime, though, keep an eye out for these 12 annoying bank fees, and do your best to avoid them.

Related: Avoid Bank Fees

1. Overdraft Fee

This fee is charged when the bank clears a transaction even if there isn't enough money in your account. According to Consumer Reports, the average bank overdraft fee is approaching $35.

You can decline overdraft services and avoid the steep fee, but that means your debit card transaction will be denied. Another option is to link your checking account to a savings account or a line of credit. Money is automatically transferred into your checking account to cover the overdraft. There is often a fee for this transaction, too (usually $5 plus interest charges on a line of credit), but it’s much smaller than paying an overdraft fee.

Of course, the best defense is to track your spending and make sure you have enough money in your account.

Read on for more.

Banks seem to find a way to add extra charges to their online services. Kiplinger has put together a list of banks where there are no fees to cringe over.

As banks attempt to bolster their bottom line, many customers, especially at big banks, are getting stung by fees for formerly free checking accounts. The assault of new fees wouldn't seem so onerous if banks were paying more on deposits. But the average yield on savings was recently 0.22 percent and on checking accounts only 0.14 percent, according to the online bank-comparison site DepositAccounts.com.

However, these seven online banks (including one credit union that anyone can join) offer free checking accounts, charge fewer fees than big banks, and tend to offer higher rates. Because these banks lack dedicated ATMs, they usually reimburse you for other banks' ATM charges. You'll have to rely on direct deposit to put money in your account, although some banks allow you to deposit checks via your smartphone. As with traditional institutions, up to $250,000 per account is protected by the Federal Deposit Insurance Corp. or the National Credit Union Administration.

Related: Little Banks, Better Deals

Ally Bank
Website: ally.com

Ally lets you open its Interest Checking account with just $1 and promises 24/7 access to its customer-service representatives by phone, email, or online chat. The account has no monthly maintenance fee and offers mobile banking and free bill pay. Plus, it rebates all ATM fees nationwide. It also offers free person-to-person payments through Popmoney.

The account pays 0.4 percent interest on balances up to $15,000 and 0.75 percent on balances over that amount. By the end of the year, you will be able to use an iPhone, Android, or BlackBerry mobile device to deposit checks, transfer funds to accounts at other banks and pay bills.

Read on for more.

Data has been breached at a payments processing firm and the personal information of up to 10 million users can potentially be compromised, says security blog Krebs on Security.

Apparently, the scale of the breach is "massive" and major credit card companies like Visa and MasterCard have been alerting their customers about this development and to reassure them that the actual Visa and MasterCard's internal systems haven't been breached. It's a third-party processing center called Global Payments Inc. Worried about your information being used by hackers? Here are a couple of security tips:

• Review: Check your credit card statements online to see if there is any unusual activity.
• Get ready: If you're one of the consumers whose data has been compromised, you will most likely be contacted by your bank. However, you should still be monitoring your information on your own, just in case you were missed.
• Sigh up for alerts: Sign up for email or text transaction alerts if your bank provides this service.
• Contact your bank immediately: Call your bank if you see any suspicious activity and have them reissue you a card immediately. The sooner you report fraud, the better protected you'll be.
• Limit your cards: You'll worry less with only one card to keep an eye on. Going forward, try to reduce the amount of cards you're juggling if it makes sense for you to do so.

It's a new year and a new you! Fresh Start is a short series detailing 12 helpful tips to start off the year right, whether it be to advance your career or increase your financial cushion. We've already given you advice on kicking your daily deal habit, quitting caffeine, and making a call to lower your bills. Here's another way to start afresh in 2012.

An important to-do on your financial list is to have a savings account. In a SavvySugar survey, the majority of readers said their biggest money worry of 2011 was not having any savings. One of the first things you need to do is to establish a savings account where you can start putting your money in. If you don't have one, it's time to get one. If you already have one, you might want to reassess the one you currently have. Here are a few tips to help you make the right decision:

• Do some research: First, do some research to see which one will be the right savings vehicle for you. There are plenty of low-risk accounts to put your money in. Some institutions include online banks, community banks, and credit unions. You can also go to savingsaccount.com to find an account with the best interest rate. For other alternatives, check out these 10 low-risk ways to earn more on your savings.
• Consider a checking account: Interest rates on savings accounts are pretty low right now and the rates seem to keep dipping. Some checking accounts offer better deals, although there are more stipulations such as the number of times you have to use your debit card. Bankrate did a study of the best high yield checking accounts a few months ago and there was one credit union that even offered a 6.7 percent interest rate. However, keep in mind that checking accounts are more liquid and it may be easier to spend the money in those types of accounts.
• Before you pick: Make sure you read the fine print and know the restrictions of your account. For example in the case of savings accounts, there is usually a limit on how much money you can leave in the account and limits on how often you can withdraw or transfer money. Ask yourself these are restrictions you can deal with.
• Leaving your bank: If you decide to leave your bank instead of moving your money around, there are several steps to take. You need to do some prep before you close your account such as opening a new account, making a list of your direct deposits and automatic withdrawals, printing out important records, checking to see if your bank will match your outstanding loans or give you a better deal, canceling your account, and asking the bank for what's left in your bank in the form of a check or cash. Get some form of confirmation (preferably a letter) that you have closed your account.
• Wait it out: The process will take a while and it may even take up to about a few months for everything to clear, so be patient!

We're thrilled to present this smart Kiplinger story here on Savvy!

If you need a safe place to park your money now, you have a surprising variety of options to consider — even if the returns on some of them aren’t pretty.

Don’t expect rates to move up anytime soon. In response to the still-sluggish economy, the Federal Reserve has announced that it will keep short-term rates near zero through mid 2013 — and maybe longer.

We’ve listed the top spots for eking out interest on your savings, depending on your tolerance for risk and how long you can tie up your money.

Money Market Deposit Accounts

For your emergency fund — at least three to six months’ worth of living expenses — and any other savings that need to be safe and immediately available, look to accounts insured by the Federal Deposit Insurance Corp., such as money market deposit accounts. Each account is insured up to $250,000.

Money market deposit accounts generally provide checks and an ATM card for withdrawing cash or to use for purchases. You can also transfer funds electronically to/from a linked checking or savings account. You are limited to six transfers per month, not including cash withdrawals at the ATM. With yields on money market deposit accounts as meager as they are -- the average account pays less than 0.3% — rate-shopping is essential.

BEST PICKS NOW: With a $2,500 deposit, you can earn 1.10% in a money market account at Incrediblebank.com, although you’ll trigger a $10 maintenance fee if your balance drops below $2,500. Other banks with good rates include AmTrust Direct ($500 to open an account) and MyBankingDirect ($5,000 to open an account). Both are affiliated with New York Community Bank, and both pay 1.15%, but at AmTrust Direct you need to maintain a $10,000 balance to qualify for that rate.

Read on for more.

The good ol' days when ING's interest rate hovered around three or four percent are now gone. Instead, the rate keeps dropping, and the online bank has just lowered its interest rate to 0.9 percent from one percent four days ago.

As the New York Times noted, ING has given full disclosure in the fine print that they "may change the Interest Rate for your account at any time."

Of course, those who have a lot of money sitting in the bank will be feeling the effects of the drop more. For example, those who have $10,000 sitting in the bank will be earning $90 a year instead of $100, which means a loss of $10. Those who have $100,000 in the bank will lose out on $100. Although it's a 10 percent drop, the current interest rate is still considered high for a savings account.

Would this drop make you switch banks?

If you're not happy with your bank, you're not alone. About 63 percent of people are dissatisfied with their financial institution, according to a recent study by consulting company Ath Power. In the aftermath of the economic crisis, banks are taking a blow from the new consumer protection laws, which causes them to raise fees and penalties and do away with rewards and freebies. If you're looking to ditch your old bank and want to try something new, here are Money Magazine's top picks for banks this year.

• Checking account: U.S. Bank's Easy Checking is a favorite among customers. It's apparently ranked very high in customer satisfaction, and you can skip the maintenance fee with a $500 direct deposit. The fees are competitive with the second favorite checking account, Chase.
• Savings account: Customers like Discover Bank Online Savings Account because of the 1.1 percent interest rate, and it has been maintaining a stable rate in the last two years. There's no minimum balance required.
• Online package: Ally Bank has the all around best package because of a high interest rate for savings accounts at 1.04 percent and a 0.9 percent rate for checking accounts. Customers also enjoy unlimited ATM refunds, same-day deposits if you scan and submit checks online, and a new debit reward program.
• All-access credit union: Credit unions offer great rates and customer service, but membership is harder to obtain. Alliant Credit Union is pretty accessible — employees from major companies can gain membership. Also if you donate $10 to the nonprofit Foster Care to Success, you'll be granted access. Its savings account has an interest rate of 1.15 percent, and no fees on non-interest checking accounts. However, you can get the 1.1 percent interest rate checking option with no fees if you set up monthly deposits.

Read on for more picks for the best banks of 2011.

ING Direct is famous for being truly digital — not having brick-and-mortar stores and offering paperless accounts. However, it seems it has succumbed to its customers' needs and is offering the option for ING account holders to use paper checks. Although paper-check payments are slowly being phased out as banking becomes more digital, checks still make up less than 25 percent of non-cash payments (which still means billions of checks are being used), according to a Federal Reserve study.

Personally, I like this move as there are a number of payments I have recently made that still require a traditional paper check. For example, there are some small businesses and less tech-savvy institutions that still only take checks. ING Direct's previous check feature would only send a paper check after you requested one, and it definitely slowed down the process. Sometimes you need to issue a check on the spot, so it's definitely handy to have a checkbook around. This missing feature from ING Direct has caused customers to rely on other checking accounts in order to distribute checks, but with the new change, customers can slowly completely rely on ING Direct as their sole form of banking.

Consumers can now buy a book of 50 checks for $5 on its website, which has an extra security feature — once you receive your checkbook, you have to log into your ING Direct account to activate it, which is similar to when you receive a new debit card. Consumerism Commentary talks about another security measure ING is taking:

Checks are interesting. Technically, any piece of paper that includes your signature and an amount qualifies as a check. If the bank of first deposit can determine the bank that holds the account and that bank can determine the correct bank account of the individual who owns the check, the check can be processed. You can print checks at home or write them on a bar napkin. You might get the evil eye from a bank teller, but if there’s enough identifying information, the check can be processed. You don’t even need to know the bank’s routing number.

That won’t be the case with ING Direct‘s checks, because this bank will only process transactions that have the right extra digits in the check number, which I would guess is a check sum that verifies the check number with the account number, using some sort of algorithm like the three- or four-digit verification code now popular on credit cards.

And that's not all. There is more good news in store for ING users as PT Money reported that customers will soon be able to make digital deposits. You will soon be able to use your phone or scanner to deposit checks!