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Question: I recently received a $25 check from ING DIRECT which I can deposit with them if I open an account in the "Orange Savings account." They claim to be members of the FDIC and they pay an interest rate of 2.75%. Re: deposits and withdrawals they say "you can move money automatically from your Orange Savings Account to your linked checking account and back." I'm nervous about doing this if this is not a legitimate company. I am 78 years old and cannot afford to make unwise financial decisions. Thanks for your help. Lois, Benzonia, MI

Answer: You're right to be cautious. Everybody should be with all the scams making the rounds.

But ING Direct is a legitimate company. (As I am writing this, the yield on the Orange Savings Account is down to 2.50% reflecting the overall decline in rates.) It's an FDIC insured online bank. ING and other online banks often offer slightly higher interest rates than their brick-and-mortar banking peers because they have less overhead. It's also a competitive strategy when many people are reluctant to do all their banking online. ING Direct is a subsidiary of ING, the Dutch multinational behemoth that is the world's 9th largest financial institution. You can learn more about the U.S. branch and its offering at its website, home.ingdirect.com.

You want to stay safe with your money, and take full advantage of the FDIC backing. . By the way, in today's low yield environment you can compare rates on other FDIC insured certificates of deposit and savings accounts (and the credit union equivalent) at a number of different places, such as www.bankrate.com.

01/06/09 by Chris Farrell

Comments (2)

T.E | Respond
January 6, 2009 10:50 PM PT

I have been with ING for over 7 years they are excellent no-load investments and they offer GICs and savings all with no fees cant get that from my local bank

All you have to know is you never ever give your pin number to anyone ever! you may be asked to enter it in the phone using the key pad but never verbally

they say the way ING does its business has allowed it to weather out this storm without causing me any worry and make sure you fill out beneficiary forms for your accounts and keep them updated

they have taken hits with the market but anyone with investment that incur risk has done the same

I have 350k in GICS with ING and sleep very well at night and have not lost a penny.

get rich quick schemes can come back to bite you in the ass I kept all mine in lower return GICS after the towers got hit and still have made more money than the persons whose investments took a 40% dump down the crapper

Jeff | Respond
January 7, 2009 6:35 AM PT

No-frills on-line money market savings accounts with restrictions on the number of transfers each month are a good alternative to short term CDs. Interest rates are comparable to 2 year CDs while still offering relatively easy access to your money (6 free transfers a month sure beats one every 2 years!) and they are still FDIC insured.

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