The Fed’s interest rate drop caused ING Direct, one of the most popular online savings accounts, to drop their rate to 4.20% APY. This is a pretty normal reaction - after all, if the bank has to pay more to borrow money, then they can’t very well afford to pay you the same amount as before.

ING Direct used to lead the board in interest rates for online savings accounts, but that’s not really true anymore. Though I do still have an ING account, there’s only a few dollars in it, just to keep it active. Every time the Fed drops rates, ING is among the first to drop their own. The other banks follow, but not quite as enthusiastically. Currently I have my savings sitting in a Bank of America money market account that pays 4.61% APY. Anyone out there still using ING should consider switching - they haven’t been truly competitive on rates for quite some time.

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