BANKING

They've reported in advertisements, that they pay 4% for their online accounts.

I'd avoid them and put the money into a money market account, which today may over about 4.7%.

Actually their rate is now 4.25%. ING was actually making more than my money market account. The one advantage is that the ING account is FDIC insured whereas a money market account is not. The rates are very comparable to a money market account. They can afford to give such high rates because they have little overhead (no walk-in type offices - simply all over the phone and/or internet).

I would only recommend if it is money you will need in the short-term as either a money market account or ING account gives such low rates.

Remember that Internet Banking has one major drawback, called HACKING.

If your moneymarket account is held withing a brokerage account, it may be
insured by the brokerage firm.

FDIC insured, but then that tells you nothing about how long it'l take to get your money back, if the firm folds. It means only that given time (!)
you'll eventually get your money back.

You can also open an account over the phone. I actually worked with ING this morning over the phone as I can never remember all my damn passwords. Logically anything can be "broken into". And most money market accounts also come with internet access as most money managers prefer that you use the internet - saves them lots of time and money rather than going into a branch office.

I do work in the financial industry so I definately have knowledge in this field. A VP actually suggested using ING (as I had a large sum, but need immediate access at times). Our money market account was yielding less at the time. As money market accounts and ING account varies the rates tend to be very close. Also most money market accounts are pretty safe as they tend to invest in very highly rated securities - it is unlikely but you can lose the principal on it (in other words there is no guaranttee that a money market account will always be valued at $1). Most companies will compensate if the value does fall below $1 as they don't want to lose business.

For longer term though I would not suggest investing in either as you really will not make much - you will simply keep yourself in line with inflation.