Capital One 360 Review – Online Checking & Savings Accounts
Capital One is a well-known financial institution that made its name in the credit card business. In fact, its most popular credit cards – Capital One Quicksilver Cash Rewards Credit Card and Capital One Venture Rewards Credit Card – routinely make our lists of the best cash back credit cards and best travel rewards credit cards, respectively.
Capital One 360, one of its major divisions, offers a related, if less sexy, suite of products: FDIC-insured online banking and personal lending services. If you’re not satisfied with the brick-and-mortar banking options in your area – or you want to cast as wide a net as possible during your search for an attractive mortgage – then Capital One 360 should be on your radar.
At first glance, Capital One 360 looks similar to online banking applications from Ally Bank, EverBank, and other well-known providers, but it offers updated features and perks that aren’t available to consumers everywhere. And, if you own a small or medium-sized business, Capital One 360 has a slew of savings accounts and CDs geared directly to your needs.
Although Capital One 360 has only existed in its current form since early 2013, it has actually been around much longer than that. Previously, the bank was known as ING Direct. Capital One purchased the company in 2012 and completed the transition to full ownership – with the name change to follow – in February 2013. Many of ING’s services and perks survived the switch: In addition to a high-interest savings account, Capital One 360 also includes a checking account, CDs, and various other financial products.
Capital One 360 really pushes its 360 Savings Account. It offers a variable APR, which at 0.75% is competitive with other online savings products.
This no-fee account requires no minimum balance and no monthly maintenance fees. Notably, you can open multiple 360 Savings accounts at once, making it a lot easier to separate and manage goal-oriented stockpiles.
You can link your 360 Savings account with your 360 Checking account, too – see below for more on that account type. Federal law limits you to six withdrawals per month, and Capital One 360 reserves the right to close your account if you routinely flout the limit. You can deposit as much as you want, however.
Capital One 360 also has Kids Savings accounts for youngsters under age 18. They’re basically the same as 360 Savings accounts, except they can be configured as custodial accounts – a valuable tool for teaching the next generation how to spend and save wisely.
Capital One 360’s high-yield money market account, known as 360 Money Market, yields 0.60% on balances under $10,000 and 1.30% on balances above $10,000. There’s no minimum deposit or balance requirement and no monthly maintenance fees. By federal law, you’re limited to six withdrawals per month here as well. Inbound deposit volume isn’t restricted at all.
The company’s CDs feature variable term lengths of between six months and five years. The full lineup:
All 360 CDs come with market-based interest rates that increase with term length. At the moment, a 60-month (five-year) CD yields 2.30%, while the 6-month CD yields 0.40%. There are no minimum balance requirements.
For CDs with terms of less than 12 months, users face an early withdrawal penalty equivalent to three months of interest. CDs with terms longer than 12 months impose an early withdrawal penalty equal to six months of interest. In both cases, then, you need to keep these accounts open for longer than the penalty period, or you lose a small portion of your principal amount.
To park your money in FDIC-insured vehicles such as savings accounts or CDs, you can simply open a Savings IRA that allows you to earn interest without accumulating a tax burden. If you want to invest in stocks, bonds, mutual funds, or ETFs, you can open an IRA with Capital One Investing and transfer funds directly from your existing, non-IRA 360 Savings account. Capital One Investing also offers 401k solutions for business owners.
The Capital One 360 Checking account comes with a fee-free debit card and access to about 40,000 ATMs nationwide. It also has a nice yield: 0.20% for deposits of less than $50,000, 0.75% on balances between $50,000 and $100,000, and 1.00% on deposits of more than $100,000.
The MONEY checking account is a joint custodial checking account designed specifically for semi-autonomous teens and their nervous parents. It has all the same perks as the standard 360 Checking account, yields 0.25% on all balances, and comes with a fee-free debit card.
My Savings Goals is a simple way to organize and track your disparate savings goals without leaving the Capital One 360 ecosystem. Use the user-friendly system to designate individual goals, automatically set aside money on a weekly or monthly basis using the Automatic Savings tool, track your progress toward the goal, and celebrate when you’re done. (Unfortunately, you don’t get a monetary reward – Capital One simply memorializes the achievement in its “Great Saves” hall of fame.)
Capital One 360 has a full lineup of business deposit accounts, investing services, and credit products under its Spark banner. Deposit and investing options include Spark Business Checking, Spark Business Savings, and the Spark 401(k). Yields on Spark Business Savings are quite competitive: 1.10% APY during the first year, then 0.40% APY moving forward. If you own a small business, visit the Capital One Spark portal for more information about this vertical.
Pro Tip: Even if you’re not interested in Capital One’s other Spark products, the company’s Spark credit cards are worth checking out. Cards like Capital One Spark Miles for Business and Capital One Spark Cash for Business, which offer rare opportunities to reduce small business expenses, routinely make our list of the best small business credit cards.
Capital One 360 offers fixed-rate and adjustable-rate mortgages. Borrowers can choose from 15- or 30-year terms for the former and 5- or 7-year fixed-rate periods for the latter. Both adjustable mortgage products amortize over 30 years.
Capital One 360 is a full-service online bank that offers checking, savings, investment, and business products. It’s worth noting that Capital One 360 has dramatically improved the yields on many of its accounts since 2014, far outpacing the painfully slow uptick in prevailing rates during the same period.
Capital One 360 isn’t perfect. While it does place a clear emphasis on financial education and ease of use, it lacks many of the user-friendly features that older online banks, such as Ally Bank, have honed over the years.
On the other hand, it does boast a low-cost DIY investment portal, Capital One Investing (formerly branded as ShareBuilder, a name that’s still visible on some internal content), along with a full suite of business products under the Spark brand. If you’re relatively comfortable with managing and investing your own business and personal finances, Capital One 360 is a great place to get started.
Capital One 360 is a full-service online bank with reasonable minimum deposit requirements and a slew of useful account options, including two great custodial products for parents looking to manage funds jointly with their kids. However, inflexible CD products and middling yields and loan APRs penalize customers with longer time horizons.
Key benefits include reasonable balance requirements and nonexistent maintenance fees, variable interest rates, solid CD rates, reasonable overdraft fees, solid mobile functionality, flexible deposit capabilities, automated savings planning and goal-making functions, flexible interest payment options on CDs, fee-free access at approximately 40,000 ATMs in the U.S., and a nice lineup of business solutions.
Major drawbacks include inflexible CD products, middling mortgage rates, and limited phone support hours. Overall, Capital One 360 is a great tool for everyday money management, saving, and investing, no matter how much money you have to work with.
Brian Martucci writes about frugal living, entrepreneurship, and innovative ideas. When he’s not interviewing small business owners or investigating time- and money-saving strategies for Money Crashers readers, he’s probably out exploring a new trail or sampling a novel cuisine. Find him on Twitter @Brian_Martucci.
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Capital One 360 Review – Online Checking & Savings Accounts
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