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A Post In Which I Invent A Good CD Promo Between Capital One And ING Direct

The merger has been ongoing for some time, but I just received the sad news that ING Direct, a favorite of many savers, and Capital One will become one bank on Nov. 1.

Rather than shedding tears, though, I immediately focused on whether this event could be used to benefit depositors in the current low-interest rate environment.

Among other things, the email I received discussed “official stuff” about FDIC insurance coverage.

This included the fact that “if you opened CDs with ING DIRECT and Capital One before November 1, 2012, they’ll stay separately insured until the 1st maturity date after May 1, 2013,” but “these coverage extensions won’t apply to deposits made after November 1, 2012.”

In plain English, this means individuals soon will be insured for deposits of $250,000 at the combined bank, instead of $500,000 at the two separate banks.

This got me thinking.

What if, between now and Nov. 1, Capital One N.A. and ING Bank, fsb (the legal names of two of the three Capital One subsidiaries) were to do a combined CD promotion?

If one bank’s pre-Nov. 1 CDs will be separately insured from the other bank’s pre-Nov. 1 CDs, couldn’t a promotion be designed so customers could potentially open twice the amount of FDIC-insured CDs they could after the merger?

Therefore, I propose a sort of “buy one, get two” sale of 5-, 7- and 10-year CDs.

It would be a fitting send-off for ING Direct – and make savers happy.

And we need a little happiness right now.

(Capital One could make us positively ecstatic by including its Capital One Bank (USA), N.A. subsidiary, which will remain a separate unit, in the promotion. Just a thought.)

To simplify things, the banks could use a single online application form, providing that opening a CD at one bank would automatically also establish a like CD at the other.

For rates, I’d suggest a premium (say, 0.25%) over Discover Bank’s currently posted APYs for these maturities (1.75%, 2.00% and 2.10%, respectively).

For a marketing hook, my idea, following ING’s traditional practice of tying promotions to holidays, would be “Halloween Madness.”

If all this seems overly ambitious, restrictions could be imposed.

For example, the promotion could be limited to existing ING customers (like me).

Or to customers over age 65 (like me).

You see, I’m flexible.

I suppose a promotion taking advantage of FDIC rules in this way might not go over well with regulators.

But these two banking giants certainly have the political muscle required to handle the government!

Is all this pure fantasy?

Probably.

But what else do I have but my fantasies to help me survive QE-ternity?

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