How to open multiple accounts at ING (now Capital One 360)

One of my favorite saving techniques is the use of targeted accounts. If I want to save for something big — like a Mini Cooper, for example — I'll open a new savings account specifically for this purpose. I first learned about this method from Robert Pagliarini's The Six-Day Financial Makeover:

Traditionally, most people invested for various vague goals and lumped all of their savings together in a single investment account. That's pretty boring. It's not very inspiring or effective. Purpose-Driven Investing satisfies our need for a purpose and our need for instant gratification by thinking of each of our goals as a separate “basket”. Each of our baskets represents a single goal with a clear purpose that we can see and grow.

What does this mean in the real world? It means that we have a single investment account for every goal. For example, if one of your goals is to take the family on a European vacation, create a separate savings account called “Family European Vacation Fund”. This account or basket contains all of your savings toward that one goal. Every penny in the account is for the European vacation — not for retirement, a new car, your emergency fund, your kids' college tuition, or any other goal.

I like this idea, and have been using it ever since I saved for my Nintendo Wii.

Until recently, I kept my targeted savings accounts at the local credit union where they earned me a paltry 0.35%. For the past few months, Get Rich Slowly readers have been urging me to move all of my savings to ING Direct (note: ING Direct is now Capital One 360, which is where I keep my emergency fund. “It's easy,” my readers tell me. “You can open multiple accounts, give them any name you want, and track them all from the same screen. You can even open a checking account!”

Last month, I finally overcame inertia to try this myself. My readers were right: opening multiple accounts at ING Direct is easy.

Step One: Choose an Account

First, I logged into my ING Direct account summary page. From there, I clicked the big “Open an Account” button.

I was directed to a page listing a variety of available accounts, including business and retirement accounts. Because I wanted to open another savings account, that's the option I selected.

On the next screen, I was asked to further refine the account type:

Step Two: Fund the Account

Next came the good part: I selected how much I wanted to put into the account and where those funds would come from. I was also able to give the new account a nickname. Since I was opening these extra accounts specifically for targeted saving, it makes sense to name each one based on my goal.

Finally, I had to agree to the terms and conditions of the account.

Step Three: Wait

Then the waiting began. Because ING Direct had to “pull” the money from my credit union, it took several days for the cash to transfer to my accounts. At first they appeared empty:

After the money had transferred, it was easy for me to track all of my savings goals in one place.

Next on my list? Exploring ING Direct's certificates of deposit and business accounts.

A Useful Tool

Thank you to all of the readers who suggested this. I don't know why I took so long to try it. I'm sure this technique isn't limited to ING Direct. I was doing something similar at my local credit union (though without the pretty interface, account nicknames, or high interest rates), so I suspect that other online banks offer similar functionality.

Not everyone needs multiple accounts to save for goals. My wife, for example, is perfectly content with a single gigantic savings account for everything. But for me, being able to separate funds like this is awesome. It keeps me motivated to save. And because it doesn't cost me a penny, I'm happy to do it.

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James
James
12 years ago

For those of us that don’t have this ability at their bank/credit union, couldn’t it be just as easy to create new accounts in quicken/mint/other financial tracking software?

I’ve never thought of doing this, but it makes a lot of sense. Thanks for the tip!

zach
zach
9 years ago
Reply to  James

this is a high-tech envelope method, with interest. If you don’t have access to ING or online banking, you can stuff some cash in an envelope and label it for the purpose it’s intended for, or you can– as you said– keep it in a checking account and do some actual accounting, though many people find that more difficult.

Amy
Amy
12 years ago

I’ve scanned the site and I can’t find out any information about minimum balance information. For example, if I set up a savings account to earmark money for let’s say my car insurance, if I then empty that account, are there fees/issues with this. Any ING Account holders know?

Eric
Eric
12 years ago

Is this a hard query on your credit report? I’m buying a house and just want to not touch my credit score until the loan has been taken out.

Side note: Does FHA loans take your credit score into account in any way?

J.D.
J.D.
12 years ago

James wrote: Couldn’t it be just as easy to create new accounts in quicken/mint/other financial tracking software? Probably. In fact, I know a lot of Get Rich Slowly readers do this very thing in Quicken. I haven’t tried it myself. Maybe I should! Amy wrote: I’ve scanned the site and I can’t find out any information about minimum balance information. From the site: “There is no minimum balance required to open your Orange Savings Account, and you don’t have to keep a specific balance in your account to qualify for a high interest rate.” Eric wrote: Is this a hard… Read more »

Jeff
Jeff
12 years ago

Have you tried using smartypig for these savings? I’m curious how this site works, but I wanted to hear from someone who’s used it.
I LOVE ING.

Julie
Julie
12 years ago

I love ING. I’ve been saving there for three years now and I started last year opening some CDs. My goal is to have 12 CDs, one maturing each month, my own version of a CD ladder. I have 7 already! It’s as easy to open a CD as it is a savings account. I’ve never seen anything from ING on my credit reports – and I review them annually.

April
April
12 years ago

I’ve been doing this since reading The Simple Dollar post. I love using the sub accounts. We have one for property taxes, and it is obvious what the money is for, so I know we won’t spend it. We have spent money in the past without remembering upcoming expenses. We’re really getting our finances in control this year, and the separate ING accounts make me feel like all of our irregular expenses have been acoounted for.

Eric J. Nisall
Eric J. Nisall
12 years ago

James–that is one way to go, however there are some people who cannot budget their money unless it is physically separated out.

JD–you are absolutely correct about it being just as easy with HSBC. I have a preference toward keeping my money there as my emergency fund because: a)they pay more than ING (3.50% until August 15th), and b)they give an ATM card for emergency access to the funds (talk about a true emergency fund!)

I also noticed that a good number of people are still skeptical about so-called “online banks”.

Rich
Rich
12 years ago

If you get a little account crazy and open too many you’ll probably eventually wonder how to close an account. Google says (or said a few weeks ago) that you had to call them to do it.

It’s actually super simple. Simply transfer all of your money out of an account and next to the transfer confirmation button there will be a “Close account” button. Click that and you’ll get any unpaid interest and close the account.

Wade
Wade
6 years ago
Reply to  Rich

6 years later and I was trying to do just this. Google brought me to this comment, and it still works the same way when closing a “360 Savings” account. Thanks!

Cindy Marsch
Cindy Marsch
12 years ago

I do a version of this compartmentalization with my Money program for just a single savings account. I create withdrawal “new items” titled for “college” or “vacation” or “gifts” and then put into and take out of each one the appropriate amount as the months roll by. I date these items in the future so I can look at the current date to know what my actual account balance is, then see how much I have assigned to each of those items, then see how much “free money” I have in the account. It works beautifully for me and with… Read more »

Benamin
Benamin
12 years ago

This is why I love internet banking over Traditional brick and mortar banks! You have so much more flexibility with regards to designated accounts for certain things. In the “old days” it was a lengthy process getting an new account established at a bank. Personally, I use USAA as a bank and one of the neatest features they have is called “Deposit at Home”. If you need to deposit a check, you simply place it in your scanner and click “submit”. It’s amazing! My dad used to tease me about my online back with the questions “that sucks that you… Read more »

Avlor
Avlor
12 years ago

Sweet! This will help me save for a new camera lens. In my main savings accounts, I have several “envelopes” with savings goals and I siphon off the interest to add to my emergency savings. But with a special account for a new camera lens – I can keep the interest in that account, helping me gather the money a bit faster!

Holocron
Holocron
12 years ago

Here’s my question: With ING (or someone else) can I open an account that is based in a foreign currency–like the Euro? I would, of course, be finding it with an US$ based account.

Why? My wife and I travel to Europe typically once a year. I toyed with the idea of opening a bank account somewhere in Europe where I could save money in Euros for future trips. This also ends up acting a slight hedge fun again the rising cost of the Euro.

I never did get anywhere with this idea. Anyone?

Sandy Naidu
Sandy Naidu
12 years ago

Interesting…Not sure if we have something like this in Australia…Going to research them this week to check out.

Norm
Norm
12 years ago

You must like orange, now here is another site that has a little less orange, but pays about 25% more on their CD’s GMAC. lots of others out there also. Nice plug for them,and for people who don’t check things out. Poor article JD.

Kevin L.
Kevin L.
12 years ago

I have 2 Orange Savings accounts, one for emergency and the other is my ‘splurge’ fund. I think this is better than opening up 5 – 6 savings accounts. At least mentally, you wouldn’t feel guilty about spending money from the splurge fund.

Without Excess
Without Excess
12 years ago

I’m content with having a single account for my savings and just recently made ING my permanent savings as well. Along the same lines what I have done is linked my Roth IRA to withdrawal from my ING automatically at the same times ING auto-deposits from my offline checking.

Jim
Jim
12 years ago

I recently used this feature on ING when I sold my car.

I would rather the buyer wire me money versus a cashiers check, yet I was not comfortable giving out my banking account number. So I created a new account on ING, gave the buyer this account number, and immediately transferred the money to my main account after payment and closed this “temporary” account.

It worked out very well.

Chris
Chris
12 years ago

@Norm

GMAC’s savings interest rates are the same as ING’s (3.00%), and JD didn’t really mention anything about CDs in this article, except that he was planning on exploring them in a future article.

He also specifically pointed out this could be done at other banks as well:

“My readers were right: opening multiple accounts at ING Direct is easy. (It’s probably easy at HSBC Direct and many other online banks, as well.)”

JD has said he uses ING as an example because thats where he banks. There’s no conspiracy here.

Avlor
Avlor
12 years ago

@Sandy
I was curious about your question and Holocron’s question. ING does have a page link for Australia – http://home.ingdirect.com/pop_up/flags.html I too am very curious now about being able to open an account in another country (and what kind of fees would be involved…hmmm.)

FranticWoman
FranticWoman
12 years ago

I use ING and sub-accts. Works well for me.

Have never seen an inquiry on my credit report regarding.

Frugal Dad
Frugal Dad
12 years ago

We’ve been using these sub-accounts at ING for the last few months and I love them! It motivates me to see savings accumulating for a specific goal. We rename one of the funds based on the next thing we need to save up for and purchase (i.e. sofa, exterior door, etc.).

Covert7
Covert7
12 years ago

You mention it doesn’t cost you a penny to split your money up into these different accounts, but does it cost you anything in lost interest?

What I mean is, do you lose out on earning more interest from a single large pool of money versus smaller pools of money split up like this?

Avlor
Avlor
12 years ago

(Ok – last comment for a while.) The ING “branches” in other countries require a person to be a resident in that country to apply for their accounts. Drat – all the ones I looked at had better interest.

J.D.
J.D.
12 years ago

@Covert7

To the best of my knowledge, all of these sub-accounts are earning the same interest rate, so there should be no loss of earnings.

Amanda
Amanda
12 years ago

My husband and I had several sub accounts “charity,” “vacation,” “child” in addition to our joint savings and emergency…. After much debate we went back to have just one joint savings, and will take the money out of there.. I kind of miss the old system though, it was easier to see the money grow!

Beth
Beth
12 years ago

Is ING FDIC insured?

Online banking scares me.

I’m just afraid that one day, the internet will explode. How will I get my money? I guess my bank could explode too, but there are other branches where I could get my money.

Am I just being too old fashioned?

Balu
Balu
12 years ago

I am already having an account at ING,but don’t know that we can open multiple savings account after reading this I did opened up another account to keep better track of my savings.

Eric J. Nisall
Eric J. Nisall
12 years ago

JD is correct, there is no loss of interest income due to the splits. It simply comes down to fundamentals: if you have $1,000 earning 3% after a year you earn $30 versus having 10 $100 accounts each earning $3 for a total of $30. Every Orange Savings account earns the same interest rate since essentially they are each separate accounts with individual account numbers.

Sandy E.
Sandy E.
12 years ago

The smartest thing I ever did for my own personal peace of mind was to do exactly what your article suggests. I have USAA online banking w/my funds in their money market account with 4 sub-accounts and I have automatic transfers taken out of my checking account, (also w/them) in amounts designated by me into those sub-accounts. For example one is called: New Used Car Fund. I have $250 going into it automatically each month. At the end of 5 years, I’ll have $15,000 by doing this. I figure I can write a check for a good used car, every… Read more »

ivonne
ivonne
8 years ago
Reply to  Sandy E.

Sandy, Thank you so much for sharing. My husband and I also use USAA and have just one savings account that we have been depositing 12% of whatever income we get. We are getting money put aside but deciding how to divide it for all of our necessities has not been so clear cut. We are tired of the pay check to paycheck living and are trying to make changes in how we manage our money. We have had the money market account but honestly, it never occurred to me to have more than one. I appreciate the article and… Read more »

Eric J. Nisall
Eric J. Nisall
12 years ago

Beth–see post #8 for a link to my blog which may alleviate some of your concerns.

Dustin Brown
Dustin Brown
12 years ago

Yep, I do this exact same thing at ING Direct. In fact, I’m buying my first fun thing using this method tomorrow – a surf board! I’ve been wanting to learn how to surf for a while now so I’m excited.

Chris from St. Mary's
Chris from St. Mary's
12 years ago

@Norm:

With GMAC you also have a minimum $500 in order to avoid fees in the 3.9% account. That doesn’t work so well if you’re opening a subaccount with $25 and are only depositing up to $100 a month.

Covert7
Covert7
12 years ago

Huh. Well math was always my nemesis. I just figured that compounding would work out better for me the more I had “piled” together rather than splitting things up.

Curse you weak math skills!!

Jesse
Jesse
12 years ago

@Holocron

I investigated this too: it turns out that you have to have a large sum in order that the interest earned offsets the fees.

If I recall, a savings account at Barclay’s with a 9 pound monthly fee and 2.5% AER means that you have to have around 4,000 pounds to break even with the fees.

That’s around $8,000 which isn’t bad, but that means that the first $8,000 of your money saved overseas is not earning interest. If you’re interested, check out Barclay’s, Lloyd’s and HSBC. Search Google for “online international savings account” too.

Patrick
Patrick
12 years ago

For those that might be interested… I’ve been a member of ING since 2004. I started when the interest rate was 2.2% and have seen it go as high as 4.5%. There are absolutely no fees for anything unless you do something wrong (NSF). You can open up as many sub accounts as you like and only have to put a $1 in to start. If you get a referral from someone and put in $250 to start, you will get a $25 gift (listed as interest) and they will get $10. You get the $25 immediately to start building… Read more »

Jason
Jason
12 years ago

@Beth: ING and HSBC are two of the biggest banks in the world, and have been around for a long, long time. The *Direct arms of their banks are their internet banks. They are fully FDIC insured, but really you should have nothing to worry about. These are international companies that are very secure. On the other end of the scale, there have been a few online banks that have gone under recently. They were FDIC insured as well, and to the best of my knowledge, the process has gone as smoothly as possible for all parties involved. At this… Read more »

john
john
12 years ago

question about checking account at ing:

I called them up and asked about a checking account and ing said they didn’t offer that.

am I mistaken? Do they really offer a checking account in addittion to the savings acct?

Sam
Sam
12 years ago

We have a bunch of ING savings accounts: emergency account, escrow accounts for each home we own, vacation/travel account, nused car fund, baby, gifts/christmas, etc.

Having a bunch of accounts works for me because I can quickly see where I am on my goals or make sure I am saving enough for my escrow payments. I have auto transfers set up for my accounts so it requires no effort on my part.

Mike
Mike
12 years ago

@Covert7

It’ll be the same interest.

For example, take $100 @ 10%. That’s $10 interest for a total of $110.

If you have 2 accounts each at $50, they’ll both earn $5 @ 10% interest. Add those 2 up, and you’ll get the same $10 interest for a $110 total.

Eric J. Nisall
Eric J. Nisall
12 years ago

John–here is the direct link to the checking account they offer called the Electric Orange account

http://home.ingdirect.com/products/products.asp?s=ElectricOrange

Paul
Paul
12 years ago

I’m pretty sure you will get a credit inquiry from ING if you open a checking account with overdraft protection. The overdraft protection is basically a form of credit, so they do check it.

After I opened my ING Orange Checking Account with overdraft, I happened to get the free annual copy of my credit report. It showed an inquiry from ING.

Chris
Chris
12 years ago

I love this setup too, I’m doing it for a “funds for fun” account. I want to do more, but I just recently took my money out of scottrade, meaning that I have over 50k in ing, so I opened up electric orange to get that extra .2% on my savings.

unfortunately, it no longer makes sense to do this for various things, so I guess I have to turn to excel to track various savings.

Brian
Brian
12 years ago

J.D. is right. I just recently did this at HSBC Direct. It was really easy. Since I already had an account applying for others was really simple. It really has helped me out to do the sub-accounts because I had a bunch of stuff lumped into one savings account. Now it is easier to see exactly what I have for each thing: school, vacation, emergency, etc.

Good post, JD.

Ed
Ed
12 years ago

I also have a few “invites” available to give out if anyone wants one for the $25 bonus (you have to open the savings or checking with $250). And I’ll get $10 too!

Email me at ronrph2000″at”gmail.com

Ryan Williams
Ryan Williams
12 years ago

I love this concept. Besides “spend less than you earn,” I think this is probably the most important strategy for personal finance. I talk about targeted accounts to many people, and the response is more often than not “wow, that’s a good idea, I should do that” and they do! I only discovered the sub-accounts recently, which makes the whole process much easier.

tiffanie
tiffanie
12 years ago

i opened my ING savings account this week and i’m contemplating moving my other savings accounts from HSBC online, although HSBC is offering 3.5% rather than INGs 3.0% and i’m contemplating whether the .5% is worth it. ING seems much more user friendly. any advice? haha

MikeVx
MikeVx
12 years ago

I just maintain one each of savings and Electric Orange at ING, my sub-account process is creating lines in an OpenOffice spreadsheet. Any spreadsheet software should work for this. This lets me create “accounts” for as many purposes as I need. To ING, it is one large lump of money, to me, it is 26 (at the moment) purpose-driven accounts. For me, this has a number of advantages. I can tweak my “accounts” as often as I care to with no danger of exceeding the 6-transfer per month limit on savings. Also, when I had an unexpected car repair to… Read more »

Charlie
Charlie
12 years ago

Hi everyone, thought I would chime in as I am employed by ING. In response to John #38 and Eric #3 ING does offer a PAPERLESS checking account called the Electric Orange and it DOES do a hard pull on your credit report. The Orange Savings and the Orange CDs DO NOT do a credit check at all – you may open as many as you want and no credit pull. The reason one is done on the Electric Orange is that customers are required to have a Line of Credit with all Electric Orange accounts. It is a great… Read more »

Frugal Bachelor
Frugal Bachelor
12 years ago

I’m trying to simplify my finances, and I need fewer accounts, not more. Sorry. Another sub-account to have to balance? No thanks. I have six savings & checking accounts among four different banks and do not need to make it even more complex by adding sub-accounts to them all. Can you make sub-accounts under a checking account? That would be tempting to me as I have separate checking accounts (at different banks) for debit transactions and for ACH transactions. It would be tempting if I could consolidate all of that into one account. I have no need for more than… Read more »

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