Using a firewall account with ING Direct
I’m pretty vocal about how much I love ING Direct. One of the many features I like about them is the ability to create and rename accounts. If I have a need for a new savings account it literally takes just a few minutes to login and create an account. One of things I’ve done recently is create a firewall account with ING Direct. I first read about this from Jim over at Blueprint for Financial Prosperity.
A firewall account is a a special account that all of your money comes into (or goes out of). It’s the only ING Direct account linked to the outside world. The account general maintains a zero or almost zero balance. When funds come in, you immediately log into ING and transfer the money to another ING savings account that isn’t linked to the outside world.
Why would you want to to this? Two reasons:
- If for some reason your firewall, or maybe even an account linked to your firewall account, was comprised your money would be safe. The only risk you would have is the money in the firewall account. The firewall account also protects you against an invalid transaction as well. I’ve actually had this happen in the past where the bank posted another person’s withdrawal against my account. It was for a rather large amount as well!
- I also use Paypal as the primary payment service for my business. While I’ve never had this personally happen to me, I have heard of Paypal reversing payments, freezing funds, and even withdrawing money from accounts linked to Paypal. While I am sure they’ve grown enough to avoid things like this, having a firewall account in attached to paypal instead of one of “real” accounts just makes me feel safer.
Creating sub-accounts with ING Direct
I’m always surprised by the number of people who don’t know you can create what ING calls sub-accounts quickly and easily. Let’s create a Christmas Savings account. Here’s how:
- Log into your ING Account. This includes entering your ID, verifying your image and phrase and entering your PIN.
- You’ll then see your account list. At the bottom you’ll see an orange link that says: “Open another account”. Click it.
- Next you’ll be presented with the ever growing list of accounts types provided by ING. Select the first one, “Orange Savings Account”.
- You’ll then see a summary page showing all the great benefits of an ING Orange savings account. Just click the big orange “Open Now” button.
- ING then shows you a list of type of Savings accounts. Select the one appropriate for you (most likely just Orange Savings Account) and click Continue.
- You’ll now see a screen prompting you for info about the account. In Nickname enter something like “Christmas Savings Account”. Then select the funding account and the amount to fund. Your account has to be funded with at least $ .50. Press Continue.
- You now will see a confirmation page. Select the check boxes (after reading the agreements of course) and press Open Account. You’ll now have a Christmas Savings account listed.
If you want to create a firewall account and already have an account that’s linked to the outside world, I’d suggest just renaming that account to be your firewall account and then creating new accounts to actually hold money. That is what I did.
Don’t have an ING Direct account? I’d seriously recommend you give them a try. They don’t have the best interest rate these days, but it’s very competitive and I’ve found their website to be incredibly user friendly and their customer service is top notch. I have an Electric Orange checking and at least 7 savings accounts with them right now.
Photo by: emarquetti