Earlier this year, Capital One's acquisition of ING Direct was approved and finalized. Consumerism Commentary readers responded, for the most part, by stating they plan on closing their ING Direct accounts in protest. I preferred to wait and see. The conflict and attitude arises from ING Direct's history of being consumer friendly and on the forefront of internet technology. Although it wasn't the first, ING Direct became one of the most popular online savings accounts due to its high interest rates on savings accounts and a vision of the future where bank branches are unnecessary in efficient. The cost savings helped the bank remain competitive, although in recent years, other banks surpassed ING Direct's interest rates. Nevertheless, the bank built a strong and loyal following, most of whom remained customers even as other banks began offering higher interest rates. The loyalty is being tested now as the bank's acquirer, Capital One, has a more nuanced reputation. Capital One has been a brand associated mostly with credit cards, and for many years, customers have reported less than stellar experiences with this company's support team. There is the impression that Capital One catered to card holders with lower than average credit, and used their increased demand for credit to push through rates and terms unfriendly to consumers. Since the recession, Capital One has been expanding its retail banking operations with savings and checking accounts, mainly through acquisitions of smaller banks. ING Direct's acquisition is a big move, and customers are concerned that the approach Capital One has taken with its credit card customers will extend to customers of the former ING Direct. Capital One is taking the next step with its acquisition by rebranding the company. Part of the acquisition called for the elimination of the ING brand, so the bank formerly known as ING Direct will soon be known as Capital One 360. By February 2013, the new bank name and logo will replace ING Direct's familiar orange ball. Capital One announced this change in a “pledge” to customers, indicating the plan to continue offering no-fee, no-minimum checking and savings accounts, and “great rates.” The marketing message continues, focusing on the company's commitment to its customers.
As a long time owner of an ING Direct, the acquisition by Capital One and now the rebranding is not enough evidence for me to move my money out of the bank. I'm not happy about the decreased competitiveness of interest rates, but I've mitigated that by opening accounts elsewhere. And for me, the purpose of savings is to have cash available in an emergency. Most of my financial assets are invested in stock or bond index funds, and that's where I concern myself more with return on investment. I'm not concerned as much about savings rates because the purpose of savings is not growth, it's protection.Still, just about any high-yield savings account is better than the typical savings account you might find at your local bank branch.