Capital One 360 Review: A Full Service, Online Bank Worth Considering

Capital One 360As part of a new once a month initiative, I’ve asked freelance writer and fellow Yakezie blogger Melissa Batai to do product reviews on quality financial products. Savings is the main foundation to building wealth and Capital One 360 looks like a good online banking solution.

ING Direct was an online bank that most people couldn’t say enough good things about. When Capital One 360 acquired ING Direct in 2011, some loyal ING fans worried about the transition.  However, their fears were unfounded as Capital One 360 has retained many of the features of ING Direct and added in their own beneficial features.

For those of you who don’t know, Capital One 360, a division of Capital One based in Virginia, is an entirely online bank.  Capital One began in 1988 and was primarily a credit card issuer.  However, the company has branched out to full-service banking, and it has grown to be one of the nation’s 10 largest banks and credit card issuers based on deposits.  It has 45,000 customer accounts and has over 1,000 branches.

Capital One 360’s Main Products

  • 360 Checking,
  • 360 Savings, and
  • Kids’ Saving Accounts

The products are available via internet access or mobile device.

360 Checking

Capital One offers a rare perk–a no fee checking account with no minimum balance requirements that also earns interest.  I don’t need to tell you how rare that is.

This checking account has three tiers to earning interest.  If your balance is between $0 and $49,999.99 you earn .20% APY.  If it’s between $50,000 and 99,999.99, you earn .80%, and if your balance is over $100,000, you earn .85% interest.  (Interest is earned daily and is determined by your account balance at the end of the day.)

To deposit money into your account, you can either take a picture of the check and complete a mobile upload, or you can have the money directly deposited.  Another option is to transfer the money from another account that you have.

Capital One 360 gives you a free MasterCard debit card connected to your account, so you can withdraw money through debit card purchases, by writing checks, or by utilizing one of the 38,000 AllPoint ATMs.

While the checking account is free, there are some fees you may have to pay including:

  • overdraft line of credit,
  • overnight delivery of a check,
  • overnight delivery of a replacement card,
  • rejected check, stop payment, and
  • foreign transaction (Capital One 360 will not charge this fee, but you may be charged by MasterCard when using the MasterCard Debit card linked to your account.)

You can only open one checking account per person.  Capital One reserves the right to check your credit rating and deny your application based on what they find.

360 Savings

Capital One 360 Savings offers great flexibility and incentives to encourage you to save.

They pay a .75% variable APR, and, like the checking account, there is no minimum account balance or fees associated with the account.

You can deposit the money by direct deposit, or by taking a picture of the check and using your computer or mobile phone and sending it in. Or you can go the classic way and send in a paper check.  After your initial deposit, you’ll need to wait 10 business days before you can withdraw the money.  After that, subsequent withdrawals will take 5 days to become available.

Capital One 360 offers several tools to encourage saving.  You can open up to 25 savings accounts and nickname them.  If you’re saving for a house down payment, a car, and a vacation, you can open up 3 separate savings accounts and nickname each one.  Then, your money is separated for your different savings goals rather than growing in one big pot.

They also offer a program called My Savings Goals where you can list your savings goals, and the program will help you track your progress and celebrate your savings victories.

Capital One 360 also offers CDs, but currently the rates are lower than the savings account (.40% APR for 6 to 24 months) so you may be smarter to leave the money in savings instead.

Kids Savings Account

The Kids Savings Account offers all of the perks of a regular Capital One 360 savings account.  There are no minimums and no fees.  The account earns .75% variable APR, and kids can open multiple savings accounts earmarked for different goals.  They can also utilize the My Savings Goals program.

In addition, parents can easily access and view their children’s savings accounts.

When the child turns 18, the Kids Savings Account is automatically upgraded to a Capital One 360 savings account.

Capital One 360’s Other Products

While Capital One 360 is mainly focused on checking and savings accounts, they also offer other services such as home loans, investing and retirement accounts, and business accounts.  If you would prefer, Capital One 360 can easily service the majority of your banking, lending, and investing needs.

Home Loans

Capital One offers both fixed and adjustable rate mortgages with competitive rates for each.  (At the time of this writing, the rate for a 15 year fixed mortgage was 3.375% and for a 30 year fixed, 4.125%.  The 5/1 adjustable rate mortgage had a 3.125% interest rate.)

In addition, Capital One boasts closing costs that are 41% below the national average.  They estimate closing costs to be $2,415.65 on a $200,000 mortgage.) Capital One offers loans of 80% of the selling price of the home e.g. LTV of 80%.

Investing Accounts

Capital One 360 offers a ShareBuilder account for your investing needs.  ShareBuilder is Capital One’s investment account platform. There is no minimum to open the account, and you can transfer money for free into your investment vehicle if it comes from one of your Capital One 360 accounts.  Online trades cost $6.95 per transaction.

Even more enticing, take advantage of Capital One 360’s opportunity to open a ShareBuilder program for kids.  You can open either a custodial account or an educational savings account for your child.  Further, you can choose to buy stocks, mutual funds or ETFs for your kids.  There is no minimum amount required, and there is no inactivity fee.

You can click ShareBuilder $100 Promo to open a ShareBuilder account and receive $100 in free trades.

Retirement Accounts

Capital One 360 can help you rollover your IRA or open an IRA account.  If you’re opening a new IRA, you can choose between a Savings IRA (invest in CDs and savings) or an Investment IRA (invest in stocks, mutual funds or ETFs).  As you may expect, there are no account fees or minimums.  Online trades are $6.95 per transaction.

Business Accounts

Capital One 360’s business savings account offers many of the same perks as their regular checking account.  They even pay an interest rate of .40% APR.

In addition, they also offer business CDs that pay the same rate as their traditional CDs.  You can also choose to open a ShareBuilder 401k.

Because Capital One 360 is an entirely online bank, they can offer higher interest rates than brick and mortar banks.  However, because they’re FDA insured, you make more interest on your money, but you don’t take additional risks.

CONCLUSION

Capital One 360 is a solid online checking and savings account solution which offers higher rates than the average bricks and mortar bank. Capital One 360 is also a full service financial institution as you can see from all the product offerings. The online tools are easy to use and by keeping your money in an online account, you’ll be much less tempted to spend money on things you don’t need. Capital One 360 currently has over 7.5 million savers and growing.

Regards,

Melissa

 

Sam started Financial Samurai in 2009 during the depths of the financial crisis as a way to make sense of chaos. After 13 years working on Wall Street, Sam decided to retire in 2012 to utilize everything he learned in business school to focus on online entrepreneurship.

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Comments

  1. says

    I am an old ING savings account customer who stayed with Capital One 360 after the acquisition. I think the service and features are just as good now as they were before. I especially like being able to have different targeted savings accounts.

  2. Austin says

    Capital One has always had some compelling perks. I am glad you wrote this article. After the October IMF outlook report discussed the feasibility of one-off 10% asset confiscation I’ve been considering spreading smaller deposits around to multiple institutions.

    • says

      I just can’t imagine what happened in Greece will happen in the US. Well at least beyond the FDIC $250K/$500K individual/married couple guarantee. But that said, I definitely spread my assets around to four banks in 2008 just in case. Now I have three main banks.

  3. Chris says

    I have used Capital One Money Market for years, I also have their credit card- their security is incredible! You can easily switch money from your checking back and forth to your money market account. I’m glad you posted this article- I feel safer having a lot of our emergency fund with Capital One.

  4. says

    I am a little old fashioned with my banking relationship. I look beyond the obvious services which I already receive for free to a lending relationship. I also look for a more personal relationship where I am treated better than the masses. I supplement my commercial relationship with a credit union (40+ years) membership. In addition, I will shop all loans for the best rate.

    • says

      Can’t beat that 40+ year relationship! I like online savings accounts as depositories b/c the interest rates are so much higher than bricks and mortar banks.

      I was at Chase yesterday and their 5-year CD is a measly 0.4%!

  5. says

    I have been using Sharebuilder for many years and I am still a big fan. I like how I can automate my investing and it does everything for me. My paycheck comes and 10% goes to Sharebuilder. They invest once my account meets a dollar amount I set, and they by the stocks I have set up. I check in every few months or when I want to change the stock I invest in. Tiny work load makes me happy.

    Maybe it’s time I check out some of their other accounts. Great write up Sam!

    • says

      Thanks for sharing your thoughts on Sharebuilder Levi. Seems like a really easy and automatic way to build wealth. I’m going to do a more indepth study on Sharebuilder and perhaps share it here. Betterment is another one that is intriguing, which is getting financial advisers all up in a huff.

  6. says

    Man – you gotta be kidding. My wife just decided to dump her capital one 360 account in favor of simple. ING used to be cool, but since capital one bought them, they are just another bank.

    James

  7. Ricky says

    If you’re going to strictly invest in a savings account, I suppose this sounds like the best option, given the easy access to the funds. However, I doubt most would meet the $50k limit since most could easily beat .80% somewhere else. So I can’t see anyone leaving $50k sitting around in a checking account for over a few days.

  8. Meghan says

    I had to change when I moved and needed to break up with my credit union anyway, so I chose Capital One 360. I’m really happy with everything about it. Deposits are easy, there is actually a branch in town should I need to deposit cash, and I earn interest! I’m getting a lot more than I did with my former institution. In fact, the only thing that 360 doesn’t do that I’d appreciate is to give me my credit score quarterly. I have my old account open still with a few bucks for that feature.

    • says

      Meghan, good to hear. Sorry about the break up, and finding a new solution. I hate not earning any interest in my cash which is why I’ve got hardly anything in my traditional bank account!

  9. says

    I’m a big fan of that feature to be able to setup multiple savings accounts and nickname them. Simple features like that can make it so much easier to start putting money away and actually see it separated out into project accounts.

    • says

      Yes, naming the accounts for target purposes super chargers our desire to save. I’m going to write more about this. So much more fun and motivating! Name everything to something which provides meaning. I do it with Moose, and I do it with my house.

  10. says

    Interesting! I have a Capital One credit card and have seen the 360 ads constantly. I’ve always worried about the need to deposit cash, though. I’m pretty sure we don’t have a branch out here in rural America. Maybe I’m just too afraid to let go of my ol’ brick and mortar bank :)

    • says

      Ben–I agree. It is difficult to let go of the brick and mortar bank. However, if you have a smartphone, depositing money where ever you are shouldn’t be an issue.

  11. ahp999 says

    I have been a customer with the original ING since 2006 till present with CapitalOne. I have enjoyed my time with them, the first thing that attracted me to them was the ease of use and great rates. Mind you back in 2006 this was the best I found, ING was giving a around a high 4% rate or so with the savings account.

    Since I have been a customer with them, I have not had to call customer service even once for any issues, because there has not been any issues. When I had CDs with them, they were so easy to setup online, I could easily redeem when I wanted. Easily renew them when I wanted. Since my work requires me to travel around overseas 90% out of the year, it becomes really annoying when I have to make long distance calls back to the states. Especially to banks or any other companies that I have accounts with. Usually its annoying because I will have to find a place that will let me make calls for a reasonable price, then also worry about time zone differences which just wastes my time. I really prefer the ease of online banking that requires minimum to no interaction in person or over the phone with customer service. For now I will stick to CapitalOne since I have had no issues since day 1. Al though interest rates are not what they used to be, but they are low every where. But capitalOne still has comparatively the most decent rates compared to other online banks. Its really no point these days to jump online banks to chase rates over tiny fractions.

    I personally spread my assets around to 3 different banks and 2 different brokerage accounts. Also I have 2 other accounts that I rarely use now, but since they are not costing me anything in minimums or fees I’ll hold on to them. With things like Mint and Personal Capital its becomes a lot easier to monitor all my accounts in one place.

  12. JW says

    I’ve been an ING Direct saver since 2007.

    I was one of the people that was severely worried that Capital One would ruin such a good thing, and I was vocal about it with them. I’m happy that at this point, the only real change has been the branding – new name, and red instead of orange. For the most part, even the user interface of the website has remained the same.

    That said, I’m not convinced that “we’re in the clear” yet. Capital One appears to have two banking divisions right now, Capital One Bank and Capital One 360 (former ING Direct). It’s entirely conceivable that they’d want to combine these two institutions to rationalize their internal operations, hopefully the allow 360 to prevail!

    One change that I haven’t liked is the new mobile app, which combines their Capital One bank, Capital One 360, and Capital One credit cards in a single-sign on portal. It exposes each customer to their breadth of products, which I understand from a business Executive’s perspective, but am annoyed by from a customer’s perspective.

    The ability to link all 360 accounts to Sharebuilder is extremely beneficial and valuable – this is the only benefit that may be able to keep me as a customer if 360 disappeared in its existing form.

    The story of Capital One 360 isn’t closed yet and hopefully Executives and COF realize the value of this product and build their business around it rather than fold it into their less attractive, existing business units.

  13. JW says

    Additionally, their checking account overdraft policies are best suited for the customer. They allow a predetermined amount of overdraft protection (based on account size and credit history) that’s charged an interest rate if and when the protection is used.

    Traditional banks often charge a hefty $30+ fee per transaction that was over-drafted and they usually order their transactions in highest value to lowest value resulting in a customer being charged more times when the largest transaction puts the checking account in the negative and then a series of smaller transactions (that the low balance could have covered) being processed first.

    All indications are that 360 is a financial institution that serves the people, not the Board…what a novel concept! Ha.

  14. Ray says

    They will not let you setup beneficiaries on your accounts. You need a trust on the outside and then fund the trust with these accounts. This is the only draw back to this bank.!

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