Tuesday, October 09, 2007

ING and Mary Kay

The two things aren't really related, but the LT read the previous Mary Kay post and said to me, "You spent two hundred dollars on make up. Isn't this going to directly affect--in the reverse way--all this progress you're making with your ING account?"

To which I say: "THBBBBBBBBBT."

But that's just the short answer! I have a longer answer, which involves more B's.

No, seriously, I do have a longer answer, mainly about ING, based on a number of questions I've received recently. (And thank you! Ask more questions! I love to talk!)

What kind of interest rates do you get?

I get 3.5% on my checking, and 4.0% on my savings. Yes, that's excellent, and getting paid real money on YOUR money is just as excellent as it sounds.

What are some other good things?

No overdraft fees! Instead, they charge you interest on any amount you're overdrawn, calculated by some complicated algorithm per day. I can be hundreds of dollars overdrawn (just for a few days, I swear!) and be charged 85 cents total for the month. That is really nice. (I'd like to pretend I'm perfect, but I'm not. Sadly.)

So what's the catch?

Well, ING doesn't have any branches. And they don't have any ATMs. So you MUST have a "real" checking account linked to your ING account. And that's a problem, because in moving money around, you can (if you're me) end up short on one or both accounts, and then you get slapped with terrible overdraft fees from Real Bank.

I opened my ING account in very late May, and let's just say that although I have made something like 35 bucks in interest since then (for doing nothing! Just saving!), I have also spent 181 dollars in overdraft fees. I have also earned money (occasionally) for ING promotions, like 1% cash back on purchases during June and July, which netted me an additional 25 dollars (roughly), but still--as of now, opening my ING account has cost me money.

UPDATE: This is actually not true, at all. I have saved a great deal of money that I would normally have had to spend in overdraft fees, since I have mentioned I've been overdrawn a few times on my ING account. Conservatively, applying Key Bank rates, I have probably saved 180 dollars. At least.

Okay, but assuming I'm not you?

First of all, congratulations! Second of all, I would say opening an ING account would be a terrific idea for you. You won't have the overdraft problem that I did.

What are some other catches?

Well, even if you're not me, you'll still have a problem writing checks from your ING account. They have an electronic check option, which works almost instantaneously, like paypal. And then they have a paper check option, which thanks to some fancy graphics you can fill out online and send to someone--and that's neat--but it would be faster to buy a donkey and a horse, have them mate, raise the mule, train it to be a pack mule, and send it to the person with your check--which the mule may or may not eat on the way (um, the check, not the person)--than to send an paper check through ING. This is a serious problem.

However, it's very tempting to send checks through ING because even if you don't have enough funds to cover the check, it won't bounce OR slap you with nasty overdraft fees. They treat it exactly like a normal overdraft. In some cases, with returned check fees being as high as $75 dollars, I can imagine this would save a large amount of money. I mean, if you were me, which you're not. So maybe this won't matter to you.

So what do YOU, personally, use your ING account for? Or alternatively, why would I open one if I can't write checks from it or deposit money into it? Sounds ridiculous?

Good point. I use my ING account for everything except writing checks. I use my debit card for all my purchases (or at least I do when I can find it), I pay all my bills, all my student loans, and I give to my Roth IRA every month from it. What I don't do: pay rent, or buy Mary Kay. Evil Mary Kay.

Had I thought about this at the time, I would have written an electronic check to Jen the Mary Kay lady from my ING account, as there wasn't a deadline like there is for some checks. And I would also have paid my utilities bill from it, because again, had I sent the check right away it would have arrived in plenty of time (even if the mule ate the first one) and I wouldn't have to worry about having enough money in the account to cover the check at the right time because they don't bounce! Wow, that would have been a great idea! I could have saved 75 dollars!

Focus, Aarwenn. Why would I want to open an ING account?

Because if you're not me, and assuming you have the same amount of savings as I do (kind of insulting for you, I'm sure you'll have more) you'll make about forty dollars in four months! Ten dollars a month in interest is nothing to sneeze at.

And also, having an account with no real branches is no challenge at all for our generation. I assume you already do everything online, including bills, student loans, dating, savings accounts, group games, etc, online. (Maybe in some future world Match.com will put a link on your profile to your ING account so your potential dates can verify your income?) So it's not so odd to have an account you can't go to, in person. I also assume you already have direct deposit of your paycheck and don't get a lot of other checks, and so you have no real need to visit your bank anyway. (Although I hope EVERYONE knows they can deposit checks by ATM at your bank. I'm always shocked at how many people don't know this.)

One additional note about ATMs: the ING site has an ATM locator, in which you can find all the free ATMs that ING has, and there's a lot, all over the country. There's one half a block away from me; it's great.

So, what's the verdict?

If you're not me, i.e. you can do math and you can learn from your mistakes, opening an ING account will be the best thing you ever did, and even if you ARE me, you'll still be happy you did. I am.

Okay. Good to know. Last question: what started you on this "Money Watch" phase?

This book: Women and Money, by Suze Orman. A fabulous, wonderful book. And you can make $100 dollars by opening a Roth IRA. I'm serious. Go out and buy it, now!

Happy Tuesday! May Mary Kay ladies run from your door and may your bank suddenly decide to suspend their overdraft fee policy!


alex said...

My thoughts on ING...

A. When was the last time you checked your interest rates? Mine went down on 9/19 to 3.5% APY (checking) and 4.3% APY (savings).

B. You do not give electronic checks their due credit. Are you sending paper checks? That takes a couple days to process and then normal mailing time to get to their destination. But the true electronic checks, where you just enter the person's account number and routing number, take no more than a day. I pay my rent this way. I send the echeck, my landlord gets an email, he verifies his account info, bada bing bada boom, the hero kisses the girl, and the world is safe again.

C. You don't necessarily need another checking account. There are some ATMs around that do not have surcharges for ING accounts. Also, anytime you're at the supermarket or drug store, just get cash back. No ATM needed.

D. ING is great and convenient and pretty much started the whole high yield internet savings/checking account business. That was years ago. However, now it's not the only game in town, nor does it have the highest interest rates anymore.

C said...

So basically you are saying that you can use imaginary money and not be charged for using that AND your real money? Lord. Where have I gone wrong?

Also, I don't think the no branches/no ATMs thing is all that horrible. My bank doesn't have branches anywhere I know of around here, but I do fine with cash. ;) I like my bank. (I do use ING for savings, though.)

Aarwenn said...

Hi Alex,

A. Good point, I changed this. Damn.
B. I misspoke here--I meant paper checks, I said electronic. And I wish my landlord was as cool as your landlord--mine requires a paper check and that's all he'll take! Boo!
C. Indeed, I mention the wide range of free ATMs. However, I'm required to have a checking account linked to my ING checking account. Maybe you aren't for your saving account? The attached checking account has nothing to do with convenience and everything to do with ING policy. I wish I could just have my ING one!
D. That's what I've heard from a few others since this post, but ING works for me so far. I'll think about moving in another six months or so.

Hi C,

Imaginary money is the best kind! You crack me up!

skydiamonde said...

Thanks!! And you probably have more savings than me since every month I go from a 4 digit to 2 digit bank account at least twice, and I only have one account, so that equals zero savings. But maybe ING will help me change that? =)

Hm... So sounds like you have an Orange Savings account and an Electric Orange account? Hm.. I like the no minimum balance on the savings account. Okay I think I'll try to open accounts this week. =)