ING Direct vs. Schwab vs. Alliant vs. Penfed...

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ING Direct vs. Schwab vs. Alliant vs. Penfed...

Postby honkeoki » Mon Jan 18, 2010 4:44 pm

I've been looking at yields and have decided it might be time to say goodbye to ING Direct. However it seems like there are a lot of really great-looking alternatives:

Ecountybank.com
- 4.75% APY on checking balance (with requirements)

Alliant CU
- 1.75% on checking balance
- 2% on savings

Penfed
- Cash back credit card
- Solid CD rates

Schwab (will likely open this any way but probably won't use their checking account...)
- Cash back credit card
- 0.75% on checking balance

ING Direct
- 0.3% on checking balance
- 1.25% on savings

Ecountybank seems like the obvious choice but it means changing my habits -- also, it means opening some other kind of account to get a cash back credit card.

ING Direct has spoiled me with an extremely easy-to-use online interface and outstanding customer service. I'm loathe to leave but 4.75% yield in an FDIC-insured account is eye-popping.

Any thoughts on all this? Any guidance about who's the top dog? Or bad experiences with the above?

Thanks in advance.
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Postby IL Int Med » Mon Jan 18, 2010 4:47 pm

I've been really happy with Alliant CU. Can't beat the 2.00% yield, even with ING
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Postby The Dude Abides » Mon Jan 18, 2010 4:53 pm

Basic question: does interest earned in these type of accounts have to be disclosed as taxable income? And if so, how is that done?
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Postby bogglehead » Mon Jan 18, 2010 4:54 pm

The Dude Abides wrote:Basic question: does interest earned in these type of accounts have to be disclosed as taxable income? And if so, how is that done?



The interest is taxable. The banks will send you a form around tax time for the prior year.
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Postby IL Int Med » Mon Jan 18, 2010 4:56 pm

I believe a 1098-INT (or is it 1099) statement gets sent to the IRS from the bank. I don't think there's a way to get out of paying the tax.
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Postby DaveTH » Mon Jan 18, 2010 5:44 pm

Basic question: does interest earned in these type of accounts have to be disclosed as taxable income? And if so, how is that done?

All U.S. banks will mail a 1099-INT statement for any interest paid. You've never had a bank account that pays interest?
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Postby tibbitts » Mon Jan 18, 2010 5:51 pm

DaveTH wrote:
Basic question: does interest earned in these type of accounts have to be disclosed as taxable income? And if so, how is that done?

All U.S. banks will mail a 1099-INT statement for any interest paid. You've never had a bank account that pays interest?

I don't think banks mail statements for less than $5 in interest, but you still owe taxes for those amounts. I've never understood that; you have to actually inquire if you didn't track your interest through the year. Several of our accounts earn interest, but less than fifty cents per year, so it rounds to zero, and no taxes are due. Maybe someone can clarify.

Paul
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Postby DaveTH » Mon Jan 18, 2010 6:04 pm

I don't think banks mail statements for less than $5 in interest, but you still owe taxes for those amounts.

Financial institutions are not required to report taxable interest, dividends and distributions payable to your accounts in an amount less than $10. However, you are required to report all interest earned. Source: IRS Publication 17, Chapter 7
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Postby natureexplorer » Mon Jan 18, 2010 6:08 pm

I pay my rent using the Person2Person feature of ING Direct. So far it keeps me there. The difference in interest is not that big unless you go with one of those checking accounts with requirements. I have been with them for a decade and have had a checking account with them from the start when they took over NetBank.
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Postby honkeoki » Mon Jan 18, 2010 6:13 pm

IL Int Med wrote:I've been really happy with Alliant CU. Can't beat the 2.00% yield, even with ING


I've read fairly good things about Alliant -- including the finance buff's post about his experiences. They seem like a fairly good replacement for ING.

One thing that really separates ING from the pack is their overdraft policy: no fees and interest only on any overdrafts you may incur. (This is particularly appealing as a safety valve to me because of my checkered past as a student -- these days I no longer have to worry about bouncing a check or a charge, but still...)
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Postby DaveTH » Mon Jan 18, 2010 6:19 pm

I've read fairly good things about Alliant -- including the finance buff's post about his experiences. They seem like a fairly good replacement for ING.

Just be aware that they do a "hard" credit inquiry when you open an account. This can temporarily affect your credit score.
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Postby simplesimon » Mon Jan 18, 2010 6:42 pm

honkeoki wrote:
IL Int Med wrote:I've been really happy with Alliant CU. Can't beat the 2.00% yield, even with ING


I've read fairly good things about Alliant -- including the finance buff's post about his experiences. They seem like a fairly good replacement for ING.

One thing that really separates ING from the pack is their overdraft policy: no fees and interest only on any overdrafts you may incur. (This is particularly appealing as a safety valve to me because of my checkered past as a student -- these days I no longer have to worry about bouncing a check or a charge, but still...)


Calculate the actual dollar amount you'd be benefiting from these interest differences. Compare that amount to the convenience, ease of use, and benefits of using ING Direct. If you're going to get hit with overdraft fees or somehow barely miss the requirements to get 4.75% interest, is it worth it?
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Re: ING Direct vs. Schwab vs. Alliant vs. Penfed...

Postby nisiprius » Mon Jan 18, 2010 6:46 pm

honkeoki wrote:I've been looking at yields and have decided it might be time to say goodbye to ING Direct. However it seems like there are a lot of really great-looking alternatives:

Ecountybank.com
- 4.75% APY on checking balance (with requirements)
I have one of those "Reward Checking" deals.

1) The interest rate is sinking fast. From 3.51% when I opened it less than a year ago to 2.76% now. I think rates may be running away from us faster than we can chase them. Don't pin too much hope on the grass staying greener on the other side.

2) I didn't open it until I was sure I had a strategy for meeting their requirements. I worked out that strategy, and so far I haven't had any issues--there's no "catch" about the requirements.

3) Part of that strategy involves automatic monthly transfers from my ING Direct account! So of course I'm keeping that account. (Overall, in effect what I've done is to keep my ING Direct account, but get all the money out of my brokerage money market accounts, keep the Reward Checking topped up to $25,000--the maximum on which it earns the high interest, and keep the rest in ING Direct.

One of my New Year's resolutions is "conservation of simplicity"--I will not start a relationship with a new financial institution unless I can completely terminate my existing relationship with an old one.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
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Re: ING Direct vs. Schwab vs. Alliant vs. Penfed...

Postby honkeoki » Mon Jan 18, 2010 6:57 pm

simplesimon wrote:Calculate the actual dollar amount you'd be benefiting from these interest differences. Compare that amount to the convenience, ease of use, and benefits of using ING Direct.


It's difficult to quantify the opportunity cost of changing banks. I know that inertia keeps us in place. Maybe the idea is to do exactly this -- quantify the benefits -- and determine whether the dollar amount of the benefits is sufficiently motivating.

nisiprius wrote:One of my New Year's resolutions is "conservation of simplicity"--I will not start a relationship with a new financial institution unless I can completely terminate my existing relationship with an old one.


And I like simplicity, too -- very Bogleheadian. But I find it very difficult to settle for good enough. Good enough is cozy and warm but perfection calls to me from just over the horizon...
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Postby pablolo » Mon Jan 18, 2010 8:59 pm

ally bank---ally.com offers excellent service as an online bank, 1.49% savings rate and just added a new checking account. (1.14%apy I believe) . pablo
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Postby ryuns » Mon Jan 18, 2010 9:07 pm

Great experience with Schwab. Unimpressive rates, but I'm optimistic they'll raise them. The cash back card is great, but I hate the FIA Card Services people. Terrible website, no function to autopay the last statement balance on the due date. I'm over it though, because 2% auto-credited to your account at the end of the month is tough to beat.

For the checking and savings, the customer service is far better than the mega banks I've dealt with.
An inconvenience is only an adventure wrongly considered; an adventure is an inconvenience rightly considered. -- GK Chesterton
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Postby nonnie » Mon Jan 18, 2010 10:18 pm

I've been with Alliant for nearly a year. I'm extremely happy with them. They have customer service reps available 24/7. You can switch $$ from checking to savings or the reverse, instantly-- either online or by phone. They also say "please," "I'm sorry," and "thank you." Hard to beat.

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Postby kaneohe » Mon Jan 18, 2010 11:18 pm

ryuns wrote:Great experience with Schwab. Terrible website, no function to autopay the last statement balance on the due date.


Call the card # to get a hard copy form to autopay statement balance.
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Postby honkeoki » Mon Jan 18, 2010 11:45 pm

nonnie wrote: They also say "please," "I'm sorry," and "thank you." Hard to beat.


ING Direct customer service has been really good as well. The older I get the more willing I am to pay a bit more for pleasant customer service. (How much more? I don't know.)
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Postby leod » Tue Jan 19, 2010 12:00 am

ING direct customer for quite some time and happy with their service although their rates are low now but i like their website, simple and easy to use. i have tried different online banks but eventually ended up with ING.

i dont like theeir password entry as i prefer the alpha number combination which is easier to remember, same with all my other accounts.
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Postby turntablist100 » Tue Jan 19, 2010 12:14 am

Interesting thread. I am looking for an online savings account that has quick and easy transfers from a checking account and a decent rate. Both have their benefits for me. Suggestions?

Oh and if they have an online checking as well I would be interested.
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Postby leod » Tue Jan 19, 2010 12:03 pm

try ING direct? there are referral links everywhere to get $25 on $250 deposit, i can also give you one :lol:
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Postby ryuns » Tue Jan 19, 2010 12:24 pm

kaneohe wrote:
ryuns wrote:Great experience with Schwab. Terrible website, no function to autopay the last statement balance on the due date.


Call the card # to get a hard copy form to autopay statement balance.


Thanks for the tip!
An inconvenience is only an adventure wrongly considered; an adventure is an inconvenience rightly considered. -- GK Chesterton
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Postby dcd » Tue Jan 19, 2010 12:47 pm

Ally is very good. I've had an account for almost a year and have no negatives to report. Competitive interest rates and excellent customer service.
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Postby GammaPoint » Tue Jan 19, 2010 1:51 pm

dcd wrote:Ally is very good. I've had an account for almost a year and have no negatives to report. Competitive interest rates and excellent customer service.


I'm also with Ally, for the past 6 months. I have no complaints and opened up a checking account with them last week. I love the fact that I don't have to worry about account minimums and other fees.
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Postby englishgirl » Tue Jan 19, 2010 2:18 pm

honkeoki wrote:One thing that really separates ING from the pack is their overdraft policy: no fees and interest only on any overdrafts you may incur. (This is particularly appealing as a safety valve to me because of my checkered past as a student -- these days I no longer have to worry about bouncing a check or a charge, but still...)


I can vouch for this - I accidentally went overdrawn recently due to a change in the dates our paychecks are deposited on, and lack of attention on my part. So my mortgage went out before my paycheck came in, although I rectified the situation the next day with a quick transfer from my emergency fund. The total cost for my overdraft? 1 cent.

Their customer service and ease of use of the website keep me happy (and the great mortgage), however, I am a bit dismayed about the further drop in interest rates
Sarah
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Postby honkeoki » Tue Jan 19, 2010 3:31 pm

englishgirl wrote: The total cost for my overdraft? 1 cent.


Is this astonishing to anyone else?

However, this may be the reason ING's rates keep falling...
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Postby englishgirl » Tue Jan 19, 2010 4:46 pm

honkeoki wrote:
englishgirl wrote: The total cost for my overdraft? 1 cent.


Is this astonishing to anyone else?

However, this may be the reason ING's rates keep falling...


It was certainly astonishing to me!
Sarah
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Postby SWP » Tue Jan 19, 2010 6:34 pm

Does anybody have experience with ACH transfers in or out of Alliant? Their fee schedule shows a $29 fee for "Manually Paid Checks and ACH Items" and another $10 fee for "Telephone Initiated ACH Entries." I called to ask for an explanation and was told there generally would be no fees if an ACH transfer was initiated elsewhere (like, say, from Vanguard); however, the rep said that if the ACH instructions come through incomplete or in error from another institution then there would be a $29 fee. So how likely is that?
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Postby nonnie » Wed Jan 20, 2010 1:47 am

I have monthly ACH transfers "out" of Alliant to Smarty Pig--seamless, no fee. I think that meets the criteria you were talking about. I'm not sure why one would have a need for the others but I think you're wise to investigate. Again, though, the primary reason I'm with Alliant is great customer service AND 2% interest with total liquidity and no catches. If I want to write a check, I initiate a transfer from my 2% savings to my 1.75% checking account.
Nonnie

You said:
Does anybody have experience with ACH transfers in or out of Alliant? Their fee schedule shows a $29 fee for "Manually Paid Checks and ACH Items" and another $10 fee for "Telephone Initiated ACH Entries." I called to ask for an explanation and was told there generally would be no fees if an ACH transfer was initiated elsewhere (like, say, from Vanguard); however, the rep said that if the ACH instructions come through incomplete or in error from another institution then there would be a $29 fee. So how likely is that?
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Postby allwin » Wed Jan 20, 2010 3:06 am

SWP wrote:Does anybody have experience with ACH transfers in or out of Alliant? Their fee schedule shows a $29 fee for "Manually Paid Checks and ACH Items" and another $10 fee for "Telephone Initiated ACH Entries." I called to ask for an explanation and was told there generally would be no fees if an ACH transfer was initiated elsewhere (like, say, from Vanguard); however, the rep said that if the ACH instructions come through incomplete or in error from another institution then there would be a $29 fee. So how likely is that?


I second nonnie. I have transferred money in/out of my Alliant CU account a couple of times (using their online website) and yet to see any fees. Apart from that, I regularly initiate ACH transfers from other sites (Vanguard, Credit card payments etc.) and those too are free.

I did a bit of research on "Manually Paid Checks and ACH Items" fee and here is what came up (from this forum thread)

The $29 fee is for ACH transactions initiated at other institutions that have an incorrect trans code. For instance, withdrawals from your share account must have a trans code of 37. A full list of codes is here. I had this problem with setting up an payment to my FIA credit card from the FIA website. They gave two choices: Checking Account and Money Market Account. I chose the latter, assuming that they would send a trans code of 37. But they sent the withdrawal to Alliant with a 27 trans code instead. Apparently the choice of Checking or Money Market has no effect. I called FIA, and they could not explain.

In any case, I got a letter from Alliant a few days later informing me of the problem. They processed the withdrawal manually but waived the $29 fee as a courtesy.
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Postby PeterT » Wed Jan 20, 2010 2:53 pm

I'm surprised PenFed doesn't have a better rate on their savings account given that their CD rates are very good.
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