Incredible returns at ING

Sounds too good to be true? 4.75% APR until April 15th, then 3.8% thereafter. My friend has been bugging me to open a savings account at ING Direct. It does sound more rewarding than my measly 1.25% at my credit union. I figured there must be a catch. So I did a Google search, but could only find positive reports by fellow bloggers and reputable sites, such as About.com and epinions.com.

ING Direct is the epitome of on-line banking, since there is no brick-and-mortar establishment and no ATMs. The drawback is the inability to walk up to a machine or teller and ask for money. Less overhead and costs - this is how ING can afford to offer an outstanding interest rate. You must have a current account established at another bank where you can have it linked to your ING account. The advantage is the liquidity of your money in a savings account as opposed to other investment tools like 5-year CDs. However, there is a 2-day transaction period for transfers. Other than that, I don't see any significant cons. If you heard of any, please share it in the comment box below.

I know some other people who have been using ING Direct. So far, so good. I had my friend send me a referral by email, so I got a $25 bonus and he got a $10 bonus when I signed up for a new account. The catch: Minimum $250 initial deposit, but after that there is no minimum required. Talk about a win-win situation. I've sent some referrals to friends, but let me know if you want one.