Capital One 360: Online banking with minimal fees
Capital One 360 has become a popular choice among savers, with competitive interest rates and low fees. This review takes a look at several features, including the latest offers and perks. Most notably, the bank is now featuring an attractive money market account with an annual percentage yield of 1 percent (as of September 13, 2016) with balances $10,000 or more. Sweetening the pot, the Capital One 360 Money Market account does not have maintenance fees.
Capital One 360 Review: History
When the announcement came in 2012 that Capital One had purchased ING DIRECT, the world's largest direct online bank, it set off alarms for many of ING's customers. Since 2000, ING had pioneered a direct-banking model that savers had come to love. Some worried that an acquisition might alter ING's unique approach to banking, in particular its emphasis on minimal fees on checking accounts and high interest rates on savings accounts. February 2013 marked the formal change from ING DIRECT to Capital One 360. To the relief of many savers, most of the best features on the popular ING deposit accounts remained intact immediately after the switch, including its:
- Customer service team. Capital One 360 representatives initially retained the ING customer service team.
- Minimal checking account fees. The 360 Checking Account carries no monthly maintenance fee and no overdraft fees. While Capital One 360 will still charge you interest on overdrawn balances, even that seems reasonable considering this is one of the few interest-bearing checking accounts still around.
If you were acquainted with the ING DIRECT line-up of products, Capital One 360's deposit offerings will seem similar:
- 360 Savings Account: Competitive interest, no fees and no minimums. Free transfers and FDIC insurance up to $250,000 are also part of the package.
- 360 Checking Account: Interest-bearing checking accounts are a rarity today - particularly ones that also charge no maintenance fees and require no minimums. Making deposits remains as simple as it was with ING, with check deposits via computer or the Capital One 360 mobile app and electronic transfers at your fingertips.
- Money Market Accounts (MMA): A flexible choice for savers, MMA accounts are a popular option. Opening an MMA online usually takes about 5-10 minutes. If you want to fund your account right away, have a check ready. Account options include individual, joint or living trust.
- Certificates of deposit (CDs): For those who prefer a little commitment in their savings, terms are available from six months to five years.
- Kids Savings Account: Children can create their own Saver ID, while still keeping an adult in charge of the major transactions.
- MONEY Teen Checking Account: Again, this account shares most of its features with the 360 Checking Account, but it also includes some helpful features for parents, such as text alerts whenever their teens makes a transaction.
Capital One 360 also offers home loans, investment products and business and retirement accounts, making it one of the more direct banks with comprehensive products and services.
Offers and perks
360 Money Market
Customers of the online bank's money market accounts can take advantage of an annual percentage yield of 1 percent (as of September 13, 2016) if they have balances $10,000 or more. This is a greater APY compared to the 0.13 percent national money market account rate for accounts $10,000 and higher, according to Informa Research Services, and the 0.08 percent national rate for non-jumbo MMA accounts reported by the FDIC. In addition to the high interest rates provided, the 360 Money Market account does not have maintenance fees and deposits up to $250,000 per depositor are protected under FDIC insurance coverage.
360 Savings Account
The 360 Savings Account earns 0.75 percent APY (as of September 13, 2016) with no minimum deposit and no monthly maintenance fees. Interest is compounded and credited monthly on this account; however, an interesting feature is their automatic savings plan which lets you transfer funds from your checking account as frequently as you like. You can also open multiple accounts and track your savings goals.
A tradition of innovation
When ING DIRECT USA launched more than a decade ago, the concept of an online-only bank was foreign to most consumers. But by offering its customers features that traditional banks couldn't, it sparked a revolution in online banking that has spawned countless competitors and redefined how customers interact with banks. Capital One appears to have wisely noted the success of ING's deposit products, as it appears to have no immediate intention of altering many of the things that brought customers to its direct-banking model in the first place.