FDIC Insurance in ING Direct & Capital One Bank Merger

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ING Direct just sent me one of the most confusing emails I’ve ever read. In it, they describe how the FDIC coverage would be changing on November 1st (assuming it is approved) and how FDIC coverage would be changing on May 1st.

Unless you have an account at ING Direct and Capital One Banking, you probably didn’t receive this email. I still have an account at Capital One from back when they had a Costco promotion and so they probably pulled my name from that list.

Here’s the confusing email:

Here’s the deal: Last February, ING DIRECT became a part of the Capital One family, but there’s still some official stuff we have to tidy up, like consolidating our legal structure. What’s that mean in real life? It just means that on November 1, 2012 (subject to regulators giving us the final go-ahead), ING Bank, fsb (that’s ING DIRECT’s official name) and Capital One, N.A. will legally become one bank – and unless you hear from us, assume they gave us two thumbs up. It also means that the FDIC coverage on your deposit accounts will stay as is until 6 months following that date (or May 1, 2013). Then, your FDIC coverage will be based on your total combined deposits at Capital One, N.A. and ING DIRECT up to the FDIC max of $250,000 per depositor – or $500,000 for joint depositors. If you opened CDs with ING Bank, fsb, and Capital One, N.A. before November 1, 2012, they’ll stay separately insured until the 1st maturity date after May 1, 2013. If you stash cash in ShareBuilder’s FDIC insured Cash Balance program, that money will transition from ING Bank, fsb to Capital One, N.A. on May 1, 2013 and will count toward the FDIC maximum. Keep in mind, these coverage extensions won’t apply to deposits made after November 1, 2012.

Your current Capital One account is held in Capital One Bank (USA), N.A. (which is totally separate from Capital One, N.A.). This means your current ING DIRECT and Capital One accounts will continue to have separate FDIC insurance, and both accounts will stay covered up to $250,000 each. So really, there’s nothing for you to do but kick back, relax, and keep on saving.

The last paragraph does give a better summary than the first paragraph’s explanation but basically ING Direct accounts will be moving over to Capital One, N.A. The account I already have with Capital One is under Capital One Bank (USA). So despite sharing the same name, these are technically two different banks so I have two different insurances of up to $250,000 each.

For what it’s worth, they did include a chart at the end but it seemed to contradict the first paragraph and so I was super confused.

And ING Direct is usually good about plain English explanations!

{ 12 comments, please add your thoughts now! }

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12 Responses to “FDIC Insurance in ING Direct & Capital One Bank Merger”

  1. Tom says:

    Ireally enjoy your site, this comment on ING and its merger its troubling. I would run, not walk to a very safe regional bank or local bank. I walked away from Bank of America three years ago and have not regretted one day. Bankrate. com will list regional and local banks and by a star rating. I would highly recommend looking at a local or regional bank for better service and more importantly solid finacials.
    All my best.
    P.S. Vanguard rocks!!

  2. michael says:

    Wait. What? It sounded clear to me until I got to the end. I was under the impression that they’d merge into (effectively) a single bank and your coverage limits would likewise merge (i.e., they’d start adding your balances together for FDIC purposes, except for CDs that predate the merger). That’s what the first part sounds like. But then they seemingly say the opposite at the end.

  3. JP Adams says:

    Thanks Jim. I agree with Michael, it looks like there are serious differences in the two paragraphs.

    Are the accounts separately protected by the FDIC or not?

    It does look like you get the coverage you need however. Together or apart you get the $250k support from the Government.

    I agree that the language is incredibly confusing. It looks like teenager speak did not work so well this time around.

    Was searching the web and it appears there will be some additional benefits to the merger:

    Hope you can enjoy some of those!

  4. Shirley says:

    ING Bank, fsb (that’s ING DIRECT’s official name) and Capital One, N.A. will legally become one bank.

    Your current Capital One account is held in Capital One Bank (USA), N.A. (which is totally separate from Capital One, N.A.).

    So there are actually three banks (branches?) and only two are merging. Is that right?

  5. govenar says:

    I have an ING Direct account, but no Capital One account. I got an email with the first paragraph, but not the second paragraph.

  6. Jim says:

    Exactly! They don’t merge, there are two banks. ING Direct becomes Capital One and Capital One Bank remains Capital One Bank. Two separate banks.

  7. Ashley says:

    Ok, I have an ING direct account and didn’t receive this e-mail. What does it mean for me?

  8. Rob says:

    ……Get your cash and RUN..!!!!!

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