Two Banks Enter, One Bank Leaves: ING vs. HSBC in … Direct Thunderdome

All we want is what's beyond the thunderdome

Please note: HSBC Direct Savings account 5.05% APY is currently expired.

Over the past few months, I signed up with both ING Direct and HSBC Direct in order to try out their online savings offerings. I had heard many positive reviews of the service at ING, but I was also stunned at the 5.05% APY interest rate being offered at HSBC. To make up my mind, I decided to give both online savings plans a try – I sent them in to battle each other in my own personal financial Thunderdome. Two banks enter … one bank leaves.

Round 1: Getting an account
I signed up for an account at each bank at roughly the same time. ING offered a $25 signup bonus at the time, whereas I could not find a similar deal from HSBC. Both accounts allowed me to create the account online, but both required additional verification before I made my first deposit. ING’s additional verification was much easier, however; all I had to do was verify a pair of small deposits in my checking account (which I was easily able to do online) and I was in. HSBC insisted on using the postal service, sending me my username and password in two separate letters before I could complete my account sign-up. Plus, there were issues with this: both the username and password were extremely long and non-intuitive and I eventually had to call the bank because I couldn’t get in with the mailed password. No such problems with ING.
Advantage: ING Direct

Round 2: Banking Interface
Once I was able to access both accounts, I spent time using the interface for both banks. Logging in was similar for both banks, though ING’s login has some unique security features (a self-verification image). Checking transactions and account balances is similar at both banks as well. The differences become apparent when you attempt account maintenance: ING’s interface makes tasks such as setting up an automated deposit easier than HSBC’s interface. This was especially important at first, as I was trying to set these up for the first time at each bank.

Another feature that I really liked with ING was that they showed you your daily interest accrual (though like HSBC, it is not actually deposited until the end of the month). This enabled me to log in regularly and see that my savings was making money for me, a key motivator as I was getting started. HSBC does not provide similar information.
Advantage: ING Direct

Round 3: Earnings
Currently, HSBC Direct is offering a 5.05% APY interest rate with no minimum balance, while ING Direct is offering a 4.4% APY interest rate with no minimum balance. This means that on my initial deposit of $250, HSBC Direct will earn $1.63 more than ING will, and the difference becomes even more pronounced over time. Of course, both banks have regularly been changing their rates over the past few years, but HSBC Direct is offering an amazing rate right now considering that it is a standard savings account.
Advantage: HSBC Direct

Round 4: Ease of Deposit/Withdrawal
I have attempted both scheduled and unscheduled deposits and withdrawals with both banks and they’ve all occurred within two business days. There is no decided advantage that one bank has over the other one.
Advantage: Moot

If you are a new saver who has never signed up with an online account before, I recommend starting with ING Direct. They are easy to sign up with, give you $25 free with a $250 initial deposit if you have a referral (leave a comment in this thread and I’ll give you one!), and the interface is very easy to manage. Plus, their interest rate is currently 4.4%, which blows away the basic savings at most brick and mortar banks.

On the other hand, if you’re considering switching, HSBC’s rate of 5.05% APY is absolutely stellar. Their interface is a bit tricker to navigate and account signup is more of a hassle, but if you have a large amount that you want to transfer from an existing savings and then not worry about it, HSBC might be the one for you.

Right now, I find myself with most of my money still in ING. I find their interface incredibly easy and comfortable to work with, plus it makes watching my money grow much easier than HSBC, something that’s very important to me. If HSBC tweaked their interface a bit, I might switch my primary savings to there, but for now, ING Direct is the winner for me.

Trent Hamm

Founder & Columnist

Trent Hamm founded The Simple Dollar in 2006 and still writes a daily column on personal finance. He’s the author of three books published by Simon & Schuster and Financial Times Press, has contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and his financial advice has been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.