Should you open a bank account at a major national branch down the street, join a credit union, or opt for an online bank?
With so many choices, deciding where to park your money can feel overwhelming — and too many people make a random decision without comparing rates, fees, and services.
Today, I’d like to explore everything Capital One Bank has to offer so you can decide whether you should use this online bank.
Capital One Bank: A Banking Hybird
Capital One Bank is the consumer banking arm of Capital One Financial Corp. which started as a credit card issuer in the 1980s and expanded into auto lending in the 1990s.
In 2005, the company launched its consumer bank which grew steadily through acquisitions during its first few years of operation. In 2012, the bank acquired ING Direct to become one of the major players in the U.S. banking market.
In fact, Capital One Bank is the 10th-largest banking institution in the nation. It has more than $373 billion in assets. It employs more than 48,000 people across the U.S., and in Canada and the U.K. too.
For consumers, Capital One Bank provides a hybrid approach in the banking industry. You’ll get the feel of an online bank with high-interest savings accounts and easy-to-use mobile apps.
But the bank also has about 750 physical branches and 40,000+ dedicated ATMs — a physical presence that resembles a brick-and-mortar bank, at least in some states.
Whether you access the bank’s services online or face-to-face, you’ll get a full-service approach for your personal finances: The bank has checking accounts, savings accounts, credit cards, auto loans, and even corporate loans.
Capital One Bank at a Glance
|Branches||✔️ – 700+|
|ATMs||✔️ – 40,000+|
What Services Does Capital One Bank Offer?
Capital One offers the following services:
- Capital One 360 Checking
- Capital One 360 Savings
- Money Teen Checking Account
- 360 CD
- 360 IRA Savings Account
- 360 IRA CD Account
- Kids Savings Account
- Auto Financing
- Credit Cards
Capital One 360 Checking
There is no minimum deposit required to open the account (and no minimum balance required to keep it open, either). Even if your account drops to $0, you still aren’t charged any monthly fees.
And — you’ll earn an APY of 0.1 percent on all balances. That’s right — no fees and an interest bearing account balance. That’s a nice combination.
This account’s overdraft fee of $35 is steep, but the bank has a one-day grace period which gives you a full business day to transfer money to cover a transaction before the fees kick in. Or, you could set up an overdraft line of credit to avoid fees.
You’ll also have easy-to-use banking options like bill pay and mobile banking.
Capital One 360 Savings
Capital One’s savings account offering is called 360 Performance Savings. Account-holders can earn an impressive 0.50% annual percentage yield (APY) by simply keeping their money in this high-yield savings account.
You don’t need to maintain a minimum balance to keep a fee-free 360 Performance Savings account open. Of course, this savings account is also FDIC-insured.
Cap One does not have a money market account.
MONEY Teen Checking Account
As this name suggests, Capital One’s MONEY account is designed for teens.
However, children age 8 and older can participate — as long a parent or legal guardian signs on as a joint account holder. When the account holder turns 18, the MONEY account automatically graduates to a 360 Checking account.
Once again, there are no fees or minimum balances to keep a MONEY account open — as it should be!
360 Certificates of Deposit
With a Capital One 360 CD account, investors can earn 0.30% APY on one year online deposits and a 0.60% APY on 5-year CDs.
So, if you’re a fan of no-risk investing, and would like to stretch your earnings further than you could get in a savings account, the 360 CD could be a good option for you.
In case you’re unfamiliar with certificates of deposit, here’s a brief refresher. Essentially, CDs are savings accounts that let you lock in interest rates. (Interest rates in non-CD savings accounts are always subject to change.)
In exchange for getting a fixed rate on your savings you agree to leave the money alone throughout the CD’s term — whether it’s 3 months, 60 months, or longer. Longer terms tend to come with higher interest rates, but not always.
If you did need to access your money before the CD term matures, you’ll have to pay a fee that will negate a chunk of your interest earnings.
Looking at the numbers, a $10,000 investment would be guaranteed to yield a return of $50 a year in the 12 month CD account.
360 IRA Savings Account
Everyone who has a job should have an Individual Retirement Account, or IRA. Capital One Bank offers traditional and Roth IRAs.
- A traditional IRA lets you deduct your deposits (up to $6,000 a year) from your annual earned income, meaning you don’t pay income taxes on the money. Instead, you’ll pay taxes when you withdraw the money during retirement.
- A Roth IRA works the other way around. You’d use after-tax money now but would not pay income tax on the funds when you withdraw them during retirement.
Both kinds of IRAs offer a great way to save for retirement. Read more about whether to open a traditional IRA or a Roth IRA here.
The 360 IRA Savings Account offers a 0.50% APY, which isn’t stunning but also isn’t the worst when compared to rates you can find elsewhere. You could lock savings rates by investing in CDs within your IRA.
360 IRA CD Account
The 360 IRA CD account lets you lock in interest rates for up to 5 years. The rates aren’t stellar at the moment. You could set a fixed rate of 0.60% APY in a 5-year CD.
But this interest pays into your IRA which means it can grow tax-free which any investor will appreciate. And, since these accounts are FDIC-insured, you’re taking virtually no risk (on $250,000 or less in deposits).
You can compare other banks’ CD rates here.
Kids Savings Account
The Capital One Kids Savings Account is the perfect way for kids to start earning a 0.50% APY from cash that might otherwise be found in their piggy banks.
There are no fees to maintain the account and no minimum balance, either.
Capital One Auto Finance
Unless you’ve got a Capital One auto loan you may be surprised to know this bank is the nation’s second-largest auto lender, behind Ally Bank.
Capital One owns an impressive 5% of the total auto financing market share.
The ease-of-use of Capital One’s Auto Financing portal plays a factor in their success in this market.
It’s a seamless experience, from prequalification to driving off the lot. Capital One can even help you find the right car online.
Credit Cards Galore
As we previously mentioned, Capital One earns the bulk of its revenue from credit cards. Before it was a consumer bank, Capital One was a credit card company.
As I write this Capital One review, the company offers 19 different credit cards that serve customers with all types of credit scores and purchasing habits.
If you want to earn travel rewards from your credit card purchases, check out the Capital One Venture Rewards Card, which offers 2x miles on every transaction and a 75,000-mile sign-up bonus.
If cash-back is your thing, the Capital One Quicksilver Card offers 1.5x cash back on all purchases and a $200 sign-up bonus.
And, the Capital One SavorOne Rewards Card offers 3% cash back on dining, entertainment, groceries, and streaming services, and 1% cashback on everything else.
Capital One Bank Pros & Cons
- Top-notch mobile apps
- Solid interest rates
- Ease of use online
- No fees or minimum balance requirements
- No minimum deposit amount to open
- International presence
- One business day grace period for overdrafts
Top-Notch Mobile Apps
Capital One’s mobile apps are consistently well-rated by consumers. The iOS app is rated at 4.5 stars out of 5 and is ranked at #7 out of all finance apps on the App Store.
J.D. Power and Associates ranked Capital One’s Mobile App as the best banking app in the U.S. two years in a row.
Solid Interest Rates
The 0.50% APY offered on the 360 Performance Savings account is good in the context of today’s rates. It’s nice to earn the 0.1% interest rate on your checking balance, too.
Compared to a traditional brick-and-mortar bank like Chase or Bank of America, which often pay only 0.01% APY, Capital One’s rate is extravagant.
Ease of Use Online
If you like to bank online, Capital One has made it extremely easy to sign up for new accounts and services. With features such as mobile check deposits, digital payments, and online bill payment, most customers will never have to visit a physical branch.
At the same time, you could find a branch or an ATM if you needed one (unlike with online-only banks like CIT Bank or Barclay’s). You can also very easily sign up for investment products and auto financing.
No Fees or Minimum Balance Requirements
I am a huge fan of Capital One Bank’s fee-free environment. This bank does not try to nickel and dime its customers with monthly maintenance fees or transaction fees. Nor does it require you to receive direct deposits or use your debit card a specific number of times to waive a monthly fee.
This is possible, in part, because Capital One earns most of its revenue from credit cards.
No Minimum Deposit Required to Open
Saving is so important so I always appreciate a bank that lets you start saving with any amount of money. You won’t need $2,500, $1,000 or even $100 to open an account — for savings, checking, or even CDs.
Capital One has several branches in Canada and London. This might not seem like a big deal, but this presence allows for millions of people living outside the U.S. to access Capital One’s robust credit card portfolio.
- Limited Reach
- Credit Card Heavy
- Limited Investment Account ROI
While Capital One has over 750 branches in the U.S., this is just a small fraction compared to Chase’s 5,000+ branches, or Wells Fargo’s 6,000+.
So, if you depend on depositing cash or talking to someone in person, you may be out of luck if you live in many areas in the U.S.
If you live in New York, Northern Virginia, Louisiana, or Texas you’ll have an easier time finding a branch. In the Boston area you’ll find Capital One Cafes which are a nice blend of coffee house and bank branch.
The ATM situation is better. You can find an Allpoint ATM to gain free access your Cap One accounts just about anywhere.
Credit Card Heavy
Capital One relies on credit card revenue which means you’ll see plenty of great offers for cards like the Capital One Platinum Mastercard.
Since you’re reading this blog, you understand that credit cards can be a valuable tool on the road to financial independence. However, without discipline, they create a slippery slope.
If you aren’t prepared with a proper emergency fund, an unexpected turn of life events can quickly cause you to fall behind on your payments — and cost you thousands of dollars over the long term in high-interest fees.
The key is to claim the perks of a credit card without paying the punitive interest rates. Pay off your balances every month if at all possible.
Limited Investment Account ROI
Simply put, the 0.65% to 1.0% APY you’ll get in Cap One’s online savings account and CDs just don’t move the needle for most investors.
For a bank, these numbers are stellar, especially considering the current market. But these rates will not help you retire early. They offer a great place to start, but over time you’ll want to know where you can earn more by investing elsewhere.
Is it Capital One Bank or Capital One 360?
Capital One Bank is now the bank’s official name, but the bank still uses Capital One 360 in the names of many of its accounts such as the 360 Performance Savings account or 360 Checking account.
Is Capital One Bank a good bank?
However, their consumer banking division only accounts for around 14% of its total revenue. A staggering 75% of Capital One’s revenue comes from credit cards.
What is a 360 Capital One account?
A 360 Capital One account refers to either the 360 Checking account or 360 Performance Savings account that we outlined above. Both types of accounts can be created with no minimum balance and have no monthly fees.
Is Capital One 360 a good savings account?
Yes, the Capital One 360 Performance Savings a good savings account.
In fact, thanks to its fee-free structure, no minimum balance requirement, and high APY, I think 360 Performance Savings is one of the best savings accounts on the market today.
Even if you prefer keeping your checking account at a local, neighborhood bank, I’d suggest opening a 360 Performance Savings account and setting up an automatic savings plan. You can set the account to transfer money from your checking account every time you get paid.
This is a great way to achieve your savings goals. Since Cap One’s savings account isn’t a money market account, you can access your money only through transfers or cash withdrawals. This limited access can make saving money easier.
Do you get paid early with Capital One 360?
If you’re asking this question, you might be confusing Capital One’s 360 Checking or 360 Performance Savings accounts (which don’t pay cash back rewards) with Capital One’s credit cards which offer rewards on qualified purchases.
If you’d like a debit card that pays rewards, consider Discover Bank’s checking account which pays 1% cash back on all debit card purchases up to $3,000 a month.
You also may be asking this question because you’re wondering whether to set up direct deposits with Capital One. Funds are generally available the next business day, so long as you deposit them before 9 p.m. the previous day.
If you want the earliest access to your direct deposits from work, consider Chime which expedites the process of receiving direct deposits.
Both Chime and Discover appear on my list of best banks for millennials.
What hidden fees does Capital One charge?
Capital One does not charge hidden fees but I would be aware of a couple issues in the bank’s fee structure:
- Wire transfers: These cost a lot — $45 for domestic wire transfers. If you anticipate wiring money with your bank account, you can find cheaper options elsewhere.
- Overdraft fees: This $35 fee is on the high side. But you do get one business day to transfer money and avoid the fee. Capital One also has an overdraft line of credit available to prevent accidental over-spending.
Is Capital One Bank Right for You?
If you like online banking and want to earn a good interest rate on your savings account, Capital One Bank deserves your consideration.
If you like claiming credit card perks like cash back and miles, you’ll have all sorts of choices. Again, use this revolving credit responsibly to avoid extravagant interest charges that chew up all your rewards, interest earnings, and more.
Only you know what’s best for your unique financial needs. So make the choice that works best for you, and start moving with confidence down the path that leads to financial independence.