ING Direct: History & Merger With Capital One

Young woman online banking on couch


Ziga Plahutar / Getty Images 

ING Bank introduced branchless banking in the Netherlands and called it ING Direct. In 2000, ING exported its concept of free online banking, high-yield checking, and savings accounts to the United States. In 2012, Capital One bought ING Direct, and its portfolio of offerings was rebranded as Capital One 360.

ING Direct History

As a unit of the giant ING Bank—but without the brick-and-mortar overhead—the online ING Direct offered better interest rates and became an attractive option for younger customers who could open a no-fee account with as little as $1 to deposit. ING Direct, whose logo bore a big orange ball, called its checking account Electric Orange.

The goal of ING Direct was to inspire a nation of savers.

A sophisticated marketer equipped with intimate knowledge of its customers' behavior, ING Direct opened customer service storefronts in select cities right about the time financial markets collapsed. With more than 7.6 million American savers, ING Direct was the largest direct bank in the country, with nearly $83 billion in deposits as of Dec. 31, 2011.

Capital One Acquisition of ING Direct

In February 2012, Capital One Financial Corp. bought ING Direct from ING Group for $6.3 billion in cash and 54 million Capital One shares, a 9.7% ownership stake.

All accounts were subsequently rebranded to Capital One 360 accounts.

Capital One 360 Product Overview

Capital One offers a live chat function for its customer service and a variety of online-only products under the 360 umbrella:

360 Performance Savings Account

The 360 Performance Savings account is a high-yield savings account that pays a competitive rate:

  • Pays 0.40% Annual Percentage Yield (APY)
  • No monthly maintenance fees
  • No minimum deposit to open
  • No ongoing minimum balance requirement
  • Mobile check deposit
  • An automated savings plan option
  • No debit cards, ATM cards, or check-writing capabilities

Depending on how much you have in your account, this rate might be enough to eliminate any need to chase rates as banks adjust their offers. Still, a savings account may not be your best option for everyday spending, and this account offers no debit or ATM cards.

360 Checking Account

The 360 Checking account is Capital One’s version of a free online checking account. There’s no need to qualify for fee waivers, and as a bonus, you earn a small amount of interest on your balance. The features include:

  • APY of 0.10%
  • No monthly maintenance charges
  • No minimum to open or ongoing balance requirement
  • Online bill pay
  • Mobile check deposit
  • Debit card for spending and cash withdrawals
  • Over 70,000 fee-free ATMs available, including Allpoint ATMs
  • No foreign transaction fee when using your debit card abroad
  • Free overdraft transfers from a linked savings account (optional)

360 Certificates of Deposit (CDs)

Capital One 360 also offers certificates of deposit (CDs) ranging from 6 months to 5 years with no minimum deposit required. The CD interest rates range from 0.10% APY for the 6-month CD to 0.40% for a 5-year CD.

Banking Experience

Capital One was ranked first for its mobile app in the J.D. Power 2019 Direct Banking Satisfaction Study. However, the bank's overall ranking was poor—seventh of eight—in the same survey.

If you are the type of customer who likes a face-to-face experience with your banker, this is unlikely to be the right option for you. Capital One Cafes operate in several states—offering financial workshops, account opening, community meetings, and coffee. Even non-customers are allowed to use them. But full-service brick-and-mortar branches exist in fewer than 10 states, and the company continues to announce branch closures, part of a larger trend within the banking industry.

In 2019, the company announced roughly 100 million U.S. credit card account holders and another 6 million in Canada were affected by a data security breach. All told, about 145,000 Social Security numbers were obtained.

Alternatives to Capital One 360

Online banks that performed better in the J.D. Power 2019 Direct Banking Satisfaction Study include Ally Bank and Discover Bank. They offer fee-free savings accounts, CDs, and other products.

Capital One 360 does not even make the list compiled by The Balance for best savings account interest rates in terms of savings account interest rates. The variety of online-only banking options has greatly expanded since ING Direct invented the branchless bank.