DISQUS

J at IHB and HFF · 2 years ago

That explains the "free" checks. Thank you for the information.

Ted · 2 years ago

What are we talking about losing here, maybe 50 cents? Less after the postage is factored into the equation.

Yawn.

Flexo · 2 years ago

Ted: You're missing the point. The bigger deal is the amount of money ING Direct is making on the float rather than other banking relationships where the customers combined earn that interest. Not billions of dollars, but not 50 cents, either. Bad for customers, fine for investors in the bank's stock.

David · 2 years ago

Nearly all online bill payment systems work the same way. They debit the account when the check is mailed.

With ING, the higher interest rate makes up for the amount of interest lost while the check is in transit. Most checking accounts have low or no interest so while your money sits in there (180 days in your example) waiting for the recipient to deposit the check, you're getting nothing anyway.

J at IHB and HFF · 2 years ago

I do not have to order ING checks, buy checks, or buy stamps, so whether ING (1) debits immediately or (2) debits later with lowered interest rates/added fees is all the same to me. I assume the money's gone when I sign the check.

Boston Gal · 2 years ago

I assume ING is treating the check like a money order. If I go to the teller and request a "bank check" I am getting a money order which costs me $1.00 and immediately removes the money from my account (even through it has not yet been cashed by the eventual receiver).

I don't use ING for checking - I have an old fashioned account with a normal checkbook - but then I get diddly for interest on the account...

So not sure if you are looking for a product that just does not exist yet (one that lets you have your cake and eat it as well).

David · 2 years ago

Bank of America debits my account as well when they send the check, not when it is cashed. I think they all do it...whether we like it or not. :-)

The Happy Rock · 2 years ago

I hadn't really thought about it, since all other bill pay services that I know of work the same way.

Personally, I am grateful for the free stamp, solid interest rate, and great service.

I only wish I could open more than one electric orange account per SSN.

MikeVx · 2 years ago

Boston Gal has this pretty much nailed down.

While I'm sure they get some other benefit, ING and the other services that do the immediate debit are bounce-proofing your payment by isolating the money that way. In the case of ING, the check will not be issued unless you have sufficient funds at the end of the day (I'm not sure if this includes the overdraft buffer) and then the funds are locked to the check, it CANNOT bounce if you short your account, because the funds are no longer tied to your account. Payment screwups are another issue, but the method being used eliminates bounces.

I used the paper check feature on ING Electric Orange recently and noticed this, I figured out the bounce-proofing angle in a matter of minutes. Yes, it may cost me some interest, but if I muff my numbers, I don't get the multiple layers of fees from a bounce. I think of it as cheap insurance.

Susan · 2 years ago

Bank of America deducted the funds when the payment was made via a paper check using bill pay about 4 days after I made the payment. The on-line message regarding this payment stated that the check had been received. Low and behold, when I got my next bill from the utility company, I had a past due balance. A call to the bank revealed that it was never received and "must have gotten lost in the mail". They explained that they gave it a "received" status because they "assume" it's received after about 4 days! I had no way of knowing this bill wasn't paid. If I had mailed the check myself, I would have realized there was a problem when the check didn't get cashed.

gautham cfl · 2 years ago

Since folks on this forum seem to be very used to this ING Direct checking account...I have a question about it...Can you set up a recurring monthly date for sending out paper checks?

Laura · 2 years ago

I had an expense similar Susan's this month with Bank of America with my rent. BoA issued the check and later marked it as "received" online. I found out via eviction notice on my door a few days later that the apartment complex had not received the check. I ended up canceling the bank check and having to write a personal check plus extra for the late fee. It took 48 hours for the funds taken out for the bank-issued check to be transferred back to me. The bank check eventually arrived at the apartment complex a week late. With these systems, there definitely needs to be some indication of if/when the check was actually cashed.

Chris · 2 years ago

gauthum, yes you can set up recurring automatic payments. When you do a bill pay, there is an option for one time or recurring.

ING does show whether the check has been cashed or not. I don't know if its accurate, but it seems to be.

I really don't mind this at all. If I'm using a paper check, its because the recipient either didn't take debit or an electronic transfer was unavailable. That ING holds on to the money between the time I send the check and the time it is cashed doesn't concern me, because I would have preferred to use debit anyway...so the result on my end is the same. If ING uses this to operate, fine by me! The other services they offer far outweigh it.

Ted · 2 years ago

Well if you think I missed that point, then I must assume you missed the part where ING pays a very good checking interest rate, provides no-fee services (bill pay, ATM access, checks), runs a great website, and holds your money safe and sound. All at no cost to you.

Sigh.

I'm not going to look it up (but you should and write a blog entry on it), but it is probably required by law that the money be taken out immediately. I seem to recall a new electronic banking law was passed recently.

MikeVx · 2 years ago

I just looked at my payment that I mentioned previously, it has a space of six days between when it was listed as mailed and when it was listed as cashed. I remember that I had been checking on it daily and it was actually a few days after the listed date when the update hit the account. I think they actually extracted the date when it hit the bank of the payee.

Georgia CPA · 2 years ago

Missed in all these comments is the realization that ING, BOA, or any other bank is not the entity that cuts the paper check to send to your recipient. The banks use a service provider like Checkfree to process the check and mail it out. Your bank deducts the money because the funds are transferred to the service provider to cover the amount of the check. They make money off of the float, sure, but would you rather pay a per check fee for the printing and mailing costs? There is NO FREE LUNCH.

Josh · 1 year ago

I can see losing the interest on the float being made up by not having fees for screwing up your account. But I just had my rent check for about a thousand dollars sent recently. My landlord says she never got the check. I requested an inquiry on the payment, and the response was basically, "Have her look carefully for it." They can't provide any proof that they didn't screw up. I'm a programmer, and realize mistakes like this are rare, but I also realize they happen. So, I had to send a new check. If my landlord gets the original check, she won't cash it. I trust her (or just wouldn't send the next month if she did cash it), but I can't get the money back in my account unless I pay for a stop payment on the check. If I don't get the stop payment, I'm out $215 in interest. So, Ted, we're not always just talking about 50 cents.

bob · 5 months ago

Josh, holy shit, that's some expensive rent you're paying. ING cancels checks after 180 days, so supposing even a 5% interest rate, your rent check would have to be $8776 in order to accumulate that much interest over the 180 day period.