Capital One is a well-known financial institution that has made a name for itself in the credit card business. Their 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 and best travel credit cards.
Capital One 360, one of its main divisions, offers a related but less attractive set of products: online banking services and FDIC-insured personal loans. If you’re not satisfied with the traditional banking options in your area or want to use the broadest possible net 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 apps from Ally Bank, EverBank, and other popular providers. Still, it offers up-to-date features and benefits not available to consumers worldwide. And, if you own a small or midsize business, Capital One 360 has a host of savings accounts and CDs geared directly toward your needs. Although Capital One 360 has only been around in its current form since early 2013, it has been around much longer. Previously, the bank was known as ING Direct. Capital One bought 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 benefits survived the change: a high-interest savings account, Capital One 360 , includes a checking history, CDs, and various other financial products.
main features
High Yield Savings Accounts
Capital One 360 pushes your 360 savings account. It offers a variable APR, which at 0.75% is competitive with other online savings products.
This free account does not require a minimum balance or monthly maintenance fees. Notably, you can open multiple 360 saving accounts simultaneously, making it easier to separate and manage goal-oriented holdings. You can also link your 360 Savings account to your 360 Account account. See below for more information on that type of account. Federal law limits you to six withdrawals per month, and Capital One 360 reserves the right to close your account if you routinely miss the limit. However, you can deposit as much as you want.
Capital One 360 also has savings accounts for children under 18. They’re the same as 360 Savings accounts, except they can be set up as custodial accounts, a valuable tool for teaching the next generation how to spend and save wisely.
High Yield Money Market Accounts
All 360 CDs come with market-based interest rates that increase with the length of the term. A 60-month (five-year) CD yields 2.30%, while a 6-month CD yields 0.40%. There are no minimum balance requirements.
You can open or renew IRA and 401(k) accounts without leaving the 360 ecosystems.
To park your money in FDIC-insured vehicles like savings accounts or CDs, you can open a Savings IRA that allows you to earn interest without accruing 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.
Current accounts that earn interest
The Capital One 360 Checking account includes a fee-free debit card and access to approximately 40,000 ATMs nationwide. It also has a good yield: 0.20% for deposits under $50,000, 0.75% on balances between $50,000 and $100,000, and 1.00% on deposits over $100,000.MONEY Checking is a shared custody checking account designed specifically for semi-autonomous teens and nervous parents. It has the same benefits as the standard 360 Checking account, yields 0.25% on all balances, and comes with a free debit card.
My savings goals
My Savings Goals is a simple way to organize and track your various savings goals without leaving the Capital One 360 ecosystem. Use the easy-to-use system to designate individual goals, automatically set aside money weekly or monthly with 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 commemorates the “Big Savings” hall of fame achievement.)
Business Services (Spark)
Capital One 360 has a full line of business deposit accounts, investment services, and credit products under its Spark banner. Deposit and investment options include Spark Business Checking, Spark Business Savings, and Spark 401(k). Yields at Spark Business Savings are quite competitive: 1.10% APY for the first year, then 0.40% APY. Visit the Capital One Spark portal to learn more about this vertical if you own a small business. Pro Tip: Even if you’re not interested in Capital One’s other Spark products, the company’s Spark credit cards are worth a look. Cards like Capital One Spark Miles for Business and Capital One Spark Cash for Business, which offer exceptional opportunities to reduce small business spending, routinely make our list of the best small business credit cards.
home loans
Capital One 360 offers fixed-rate and adjustable-rate mortgages. Borrowers can choose 15- or 30-year terms for the former and 5- or 7-year fixed-rate terms for the latter. Both adjustable mortgage products amortize over 30 years.
advantages
- Reasonable balance requirements and no maintenance fees for cash accounts. All Capital One 360 basic checking and savings accounts, including children’s products, have no minimum balance requirements or maintenance fees. This is a big deal in a world where physical banks typically charge monthly fees on regular checking accounts. That said, many online banks remain fee-free.
- Interest-Based Overdraft Fees. Unlike checking accounts at many banks, 360 Checking doesn’t charge overdraft fees on negative balances. Instead, it demands a fixed, daily interest rate (currently 12% APR) on all overdrafts, with a total negative limit of $5,000. The daily overdraft fee with a negative balance of $4,999, for example, is only $1.64. Of course, these fees can add up over time, but they are a far cry from the $30 or $50 one-time fees that other banks charge.
- Solid performance on CD. Capital One 360 CD yields have improved significantly in recent years. The 60-month CD 360 yields 2.30% per year, which is competitive with some of the best online banks on the market. Yields on short-term CDs are naturally not as generous but mostly competitive at prevailing rates. However, savings and money market accounts offer better deals for short-term balances.
- Mobile access for savings, checking, and investments. Given how hostile many of Capital One 360’s main competitors are, the fact that you can access your 360 savings, checking, and investment accounts from any wireless-enabled mobile device are worth it. Interface differences aside, 360’s mobile experience is virtually identical to its desktop version.
- Automatic Savings Plan and My Savings Goals. Savings 360 comes with some novel programs that encourage and reward regular saving patterns. The Automatic Savings Plan is self-explanatory: it automatically transfers a preset amount from your checking account to your savings account once a week. You can change or discontinue this feature at any time. My Savings Goals lets you set individual savings goals, track your progress toward them, and receive regular updates on how long it will take to get to your current pace. Since you can open multiple savings accounts simultaneously, you can keep track of these goals separately and avoid mix-ups or redundant deposits.
Disadvantages
- Unyielding CD Products. With stiff early withdrawal penalties and no recourse against inflation, Capital One 360 CDs lack the flexibility increasingly common to CDs from other banks. Should market rates rise during her tenure de Ella, Ally’s highly publicized “Raise, Your Rate” CD allows customers to adjust their vehicle’s interest rate once and twice during four years. Ally also offers a “penalty-free” CD that grants early withdrawal privileges at any time during its 11-month term without requiring users to forfeit earned interest or pay additional fees.
- Middling Mortgage Rates. Although subject to change and can vary significantly based on borrowers’ financial profiles, Capital One 360’s best home loan rates are considerably above the national average. Unless you can get a special deal through the bank’s lending office, you may want to look elsewhere for a market-rate mortgage loan. Please note this is subject to change, so don’t take mine as the final word.
- Limited hours of phone support. Capital One 360 has a robust customer support infrastructure that includes an impressive “knowledge database” of help topics and FAQs. However, many bank customers still like to talk to a live person about potential problems, and the bank is less stable on this front. Unlike Ally’s 24-hour phone bank, the 360 call center is only open 12 hours per day (8 am to 8 pm Central Standard Time), though it does stay those hours on weekends. The company counters that it responds to emailed requests within 24 hours so that it might be a better route for customers with in-depth questions.
end word
Capital One 360 is a full-service online bank offering checking, savings, investment, and business products. It’s worth noting that Capital One 360 has dramatically improved yields on many of its accounts since 2014, far outpacing the slow, sluggish rally in prevailing rates over the same period.
Capital One 360 is not perfect. While it clearly emphasizes financial literacy and ease of use, it lacks many of the user-friendly features that older online banks like Ally Bank have perfected over the years.
