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From the Wall Street Journal On-Line, April 11, 2006

ING Direct Plans
Checking Account
With High Yield

April 11, 2006; Page D2

In the latest move by an online bank to expand its offerings, ING Direct, a unit of ING Groep NV, is getting ready to launch a high-yielding checking account.

The new account, dubbed "Electric Orange," is expected to offer an initial annual percentage yield of 3%, although that may change depending on the actual launch date. The account will have no minimum-balance requirements or fees. ING Direct -- which until now has offered only savings accounts, certificates of deposit, home loans and mutual funds -- plans to roll it out to customers this summer.

Customers who sign up for the account will get a debit card instead of an actual checkbook. Instead, the bank will issue "virtual checks" by transferring funds between bank accounts. Customers can also request that the bank issue paper checks for payment purposes.

ING Direct won't charge a fee for using other banks' automated teller machines, though it will pass along any fees charged by other banks for using their ATMs, says Arkadi Kuhlmann, the bank's president and chief executive. ING Direct has four million customers with $60 billion in assets in the U.S. Customers have an average savings-account balance of $12,000, Mr. Kuhlmann says.

ING Direct's move into checking accounts comes at a time when banks are aggressively courting new customer deposits to bolster profits. Competition among online banks is especially fierce. ING Direct offers a 4% rate on its savings account. Last month, Citigroup Inc.'s Citibank unit launched its own Internet bank, Citibank Direct, which is offering a 4.5% rate on a savings account to customers who open a linked Citibank Direct checking account.

HSBC Holdings PLC's HSBCDirect is paying 4.8% on its savings account until April 30, while, a unit of New York's Emigrant Savings Bank, is paying 4.5% on its savings account. By contrast, the average rates on statement savings accounts and interest-bearing checking accounts are 0.53% and 0.29%, respectively, according to

Online banks have typically focused on offering high-yielding savings vehicles, such as savings accounts, money-market accounts and CDs, often requiring customers to link those accounts to checking accounts held at brick-and-mortar banks. Still, there are some online banks that offer checking accounts.

EverBank Direct, a unit of EverBank Financial Corp., is offering new customers an introductory rate of 5.51% for three months on its online interest checking account; after the introductory period, the rate drops to 3.01% to 4.01%, depending on the balance. The bank reimburses up to $6 a month in ATM fees. Presidential Bank FSB of Bethesda, Md., is offering a checking account paying an annual yield of 4.37% to customers who open the account online or through one of its branches; a minimum of $1,500 is required to open the account, and customers must maintain a minimum balance of $1,000 to avoid monthly fees.
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