Pros

No monthly maintenance fees

One of the biggest selling points of the Electric Orange Checking account is that there are no monthly maintenance fees – period. There is no minimum balance requirement, direct deposit requirement, or debit card usage requirement.

Interest on checking deposits

Electric Orange pays interest on deposits based on the balance on the account. Deposits up to $50,000 collect 0.20% APY, $50,000 to $100,000 collect 0.85% APY, and over $100,000 gets you an APY of 0.90%. Granted 0.20% APY isn’t much, but is better than almost any other checking account out there, and if you have a good pile of cash this could be the perfect place for it.

Free debit cards and bill pay

Electric Orange offers a free debit card and free bill pay service. When it was introduced Electric Orange was designed to be a nearly paperless checking account, thus the encouragement to make payments electronically. Electronic payments can be made to merchants or to individuals using their Person2Person transfer service. You can also have a paper check sent via postal mail for free for those vendors you can’t pay electronically.

No overdraft fees

Unlike most other banks that love to soak you with overdraft fees, there are no overdraft fees on the Electric Orange checking. I think this fact is grossly oversold by ING on their website (the main page for the Electric Orange account just has a link inviting users to compare their overdraft fees to other banks without specifically stating there is no overdraft fee). The only fee related to overdrafts is an interest charge for accessing an overdraft line of credit based on the amount of the overdraft.

Free ATM access at select locations

For an online bank, ING Direct actually has a pretty good ATM network that you can access for free. You can access any ATM in the Allpoint network (most ATMs in this area are in retail locations of CVS, Walgreens, and Target) and, thanks to the buyout by Capital One, any Capital One ATM.

$50 Bonus for New Customers

As noted above, you can get a $50 bonus for opening an Electric Orange account. Just use one of the links below to sign up and make three card or Person2Person payments to earn your $50 bonus. Please see the fine print below for requirements.  Disclosure: these are referral links for which I will earn $10 for each successful referral.

ING Electric Orange Bonus 1

ING Electric Orange Bonus 2

ING Electric Orange Bonus 3

ING Electric Orange Bonus 4

ING Electric Orange Bonus 5

Bonuses are only paid for accounts that are opened and a total of 3 Card purchases or Person2Person Payments (or any combo of the two) are made within 45 days of account opening. The $50 bonus is available only for new accounts with a new Customer as primary owner. Only one bonus will be provided per household. Your $50 bonus will automatically be deposited into your account on day 50.

Cons

No branch network

Because it is an online bank, there is no branch network for the Electric Orange account, meaning there is no way to directly deposit cash into your account or talk to someone face-to-face it the rare event there is a problem with your account. This also makes depositing of paper checks a pain, as noted below.

Difficulty depositing paper checks

In the era of electronic transfers and direct deposits, everyone still gets paper checks occasionally. Currently the only way to deposit paper checks directly into your Electric Orange account is to mail them in to ING Direct, which means a significant delay in how quickly the funds are credited to your account. ING Direct has announced that customers will be able to upload check images for deposit via computer or smartphone app beginning sometime this spring, but until then this will continue to be a significant drawback of the Electric Orange account.

Limited check writing capability

For most checking accounts you have the option of ordering checks directly through the bank, ordering from a third party (usually at a significant discount to the bank’s charge), or printing your own check on your home computer. For the Electric Orange account, however, you must order checks from ING Direct at a cost of $5.00 per 50 checks. Granted there is an additional layer of security to this arrangement as checks must be activated before use, but many will be annoyed at having to pay more for their printed checks. It is worth pointing out that this does work almost like a service fee for check writing, and that by minimizing the costs of processing paper checks they can offer other benefits without fees.

The ability to write paper checks is an improvement to the Electric Orange account since its introduction, even if the checks must be ordered from ING Direct. Previously customers could not write paper checks at all.

Overall assessment

My overall assessment is that this is a great alternative to the fee happy checking accounts offered by most larger banks these days. Provided you don’t need to make cash deposits to your account, don’t write a lot of paper checks, and do most of your banking electronically you should definitely consider Electric Orange for your checking account needs.

If this doesn’t quite fit your needs you may also consider going to a local credit union or community bank with a truly free checking account. Compared to paying monthly maintenance fees at the big banks, you will still come out ahead.

The problem with this is that there are lots of people such as the self-employed and employees of small businesses that don’t have direct deposit as an option. There are others of us that maintain multiple accounts (for instance, a local checking account for ATM access and small deposits and a high-yield checking through an online bank) and don’t necessarily want to send our direct deposit to a particular account.

Well, there is hope for those who are in this situation or that just want to take advantage of bonus offers requiring direct deposit. A direct deposit is simply an electronic transfer of funds to your account. This is usually done by a method known as ACH. The thing is that a ACH transfer to your account can be done in a number of ways besides through a company’s payroll department. Transfers from other bank accounts (either your own or someone else’s) and even from online payment services like Paypal are done by ACH as well. Unless a real person is looking at the detail of the ACH transfer, there is no real way to automatically tell if the ACH is a payroll deposit or not. Most of the time a bank will count these non-payroll transfers as a direct deposit, which allows you to avoid service fees and/or collect promotional bonuses based on the use of direct deposit.

The easiest way to simulate a direct deposit is by using another account you control that offers free outgoing transfers. Online savings accounts like ING Direct (see my ING Direct Bonus Page for info on getting a referral for a $25 or $50 bonus), Emigrant Direct, or HSBC Direct all allow this. A few banks and credit unions offer this service free of charge as well. Some people have also successfully used PayPal transfers to simulate a direct deposit.

There is a lengthy thread on Fatwallet discussing this concept and compiling user experiences simulating direct deposits using various methods with different banks. I would caution that you SHOULD NOT CALL the bank and ask if whatever method will count, as they will almost always tell you no and it may tip them off to look for such activity on your account.

E-Loan Savings – I signed up for this one last year when they had the highest interest rate, but they have since dropped their rate. The interest rate drop along with a bad customer service experience trying to change my externally linked account make this an easy one to close. I called the 800 number and was told I had to submit a request through the website. I submitted the online request and they closed the account without issue.

EmigrantDirect – Another one that once had the highest interest rate, but has since fallen out of relevance. That along with their crappy website adds this one to the list. Same as ELoan, the 800 number instructed me to submit an online request, and upon submitting the online request they closed the account without issue.

HSBC Interest Checking – I only opened this with $1 for a $75 bonus. Except for the bonus, this account is crap. We are past the 180 days I have to keep it open to keep the bonus, so this account is gone. I sent an email through their Bankmail function requesting the account be closed and the funds be transferred to my HSBC Online Savings. It took several days, but they eventually closed the account as directed and transferred the funds to my savings account.
Citi Ultimate Savings – Another one opened with $1, this time for a $50 bonus. The interest rate is lower than competitors, so bye-bye Citibank! I couldn’t find my online user ID and password, so I just called the 800 number from the confirmation when I opened the account. I talked to the rep for about five minutes to get the account closed and a check sent to the house for the balance.

I know some people are asking why I bother closing the accounts that have no minimum balance requirement or fees, but I am just tried of having all of these abandoned accounts out there. It is all about simplification. On the off chance any of these accounts become the new rate leader, I can always apply for a new account if I really wanted to.

These four accounts are just the beginning. As time permits over the next several weeks I plan to go through my entire portfolio of accounts and analyze their role in our family’s finances, which of course I will chronicle here for everyone’s review and amusement. I really want to nail down the pros and cons of each account, whether its purpose could be better served by a different product, a justification for keeping the account and ultimately a decision on whether to put it to sleep. Stay tuned!