Angelica Leicht / Mortgage Expert

While INGDirect.com was not the first business in the U.S. to offer direct online banking, it offered one of the earliest simple online savings accounts. The bank became well known for its low fees, and when its customers heard that it was changing hands in 2011, one customer pleaded with executives not to “turn ING Direct into just another bank that the old ING Direct would’ve made fun of.”

In March 2015, INGDirect.com went offline after a successful acquisition by Capital One. Attempts to visit the site return the message that “INGDirect.com’s server IP address could not be found.”

We follow the history of INGDirect.com to find out what happened to this bank and why it went offline.

The origin of INGDirect.com

The origins of INGDirect.com can be traced back to a merger between the NMB Postbank Groep bank and Nationale–Nederlanden, an insurance company in the Netherlands. This led to the establishment of Internationale Nederlanden Groep in 1991.

The company’s abbreviation, I-N-G, became the moniker most people now associate it with. The firm followed suit and changed its name to ING Groep N.V. The Dutch bank established operations in different parts of the world, and much of ING Groep N.V.’s growth and success has been attributed to its significant acquisitions and the setting up of ING Direct.

ING Direct’s first banking operation in the U.S. was started in 2000. Its headquarters were located in Wilmington, Delaware.

ING Direct’s competitive advantage

When ING Direct started serving the American market, it was offering its customers interest rates of 5% on its investment savings account. At that time, the average personal savings account interest rate was 4.2% in the U.S.

ING Direct’s products came with offers, such as the “FDIC-insured savings account with no fees,” and “no required minimums or service charge, no matter how much you [had] on deposit.” Also, investment savings accounts did not have any terms and conditions which required the bank to lock in any amount of customer savings for specific periods.

ING Direct’s online savings accounts could be opened with as little as $1. The bank indicated that its goal “was to inspire a nation of savers.”

ING Direct buys ShareBuilder

In November 2007, ING Direct USA acquired ShareBuilder, a privately-held online financial company based in Seattle.

“ING Direct has empowered savers with great value, ease of transactions and unmatched customer service,” Arkadi Kuhlmann, president and CEO of ING Direct, said. “Now, with the addition of ShareBuilder, we can provide customers with a low-cost, easy-to-understand way to invest regularly. Both companies share a mission to enable Main Street America to build and manage their wealth in a straightforward manner.”

ShareBuilder was like ING Direct USA in many ways. Both used a direct business model that offered services remotely and targeted early consumers with low-cost offerings. Both businesses aimed to allow consumers to enjoy low fees per individual transaction, with no account and investment minimum.

At the time of the transaction, ING Direct USA reported that it had over 6 million American customers and $77 billion in assets.

Capital One buys ING Direct USA

Capital One acquired ING Direct USA for $6.3 billion in cash and 54 million Capital One shares in February 2012. As mentioned, when customers got the news that Capital One had purchased ING Direct USA, they did not hide their disappointment.

Capital One assured them that the services they had enjoyed so far would continue and a few other services would be added. This included depositing checks directly to ING Direct accounts, along with fee-free cash withdrawals from Capital One ATMs and other free Allpoint ATMs. However, the ING Direct name would be dropped.

Capital One assured customers that the free accounts and 4.5% interest rate on savings accounts they had enjoyed at ING Direct and ShareBuilder would not change. The new owner also promised that it would continue to be customer-friendly.

Customers would also not need to visit any Capital One bank branch, as all the operations of ING Direct USA – customer service numbers, login details, website, and apps – would remain in place.

The challenges at Capital One

Although the assurances were given by both ING Direct and Capital One that the services that consumers had previously enjoyed wouldn’t change, consumers still expressed their apprehension. But why were INGDirect.com customers worried about the acquisition of the direct bank by Capital One?

Part of the issue was that ING Direct had built a robust and loyal customer base over the years through its low fees and high-interest rates on savings accounts. There were banks that offered higher interest rates on their savings accounts at the time of the acquisition, but most ING Direct customers remained loyal.

Capital One, on the other hand, was a brand mostly associated with credit cards. “Capital One will need to up-their-game to maintain the high level of customer service that ING Direct has generally been able to provide to their customers in the past,” wrote a commenter.

There was also a feeling that Capital One “catered to cardholders with lower than average credit, and used their increased demand for credit to push through rates and terms unfriendly to consumers.”

What then happened to INGDirect.com?

The rebranding of ING Direct to Capital One 360 signaled the end of INGDirect.com in the U.S., and the ING Direct name had to be dropped as part of the acquisition deal. “ING Group will allow a one-year transitional use of ‘ING Direct’ from February 17, 2012. So, yes, our name will gradually change over time (and it’s going to take some getting used to by all of us),” Capital One stated at the time of the rebranding.

Most customers knew the rebranding was coming but had no idea what the new name would be until the bank announced it on its Facebook page, stating: “ING Direct’s new name come February will be Capital One 360.”

Notwithstanding the changes, Capital One had a message for its new customers: “All the good stuff you’ve come to love from ING Direct is staying the same, and we’ll have the same commitment to saving you time and money.”

This, of course, changed when the bank went completely offline a few years later.