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FDIC Insurance in ING Direct & Capital One Bank Merger

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 [3] 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!