As 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.
The products are available via internet access or mobile device.
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:
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.
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.
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.
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.
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%.
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.
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.
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.
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.