Capital One 360

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The banking industry is littered with giants that have been in existence for 100 years or more in some form or another. Capital One is an exception — this bank is less than 25 years old, but in just a couple of decades, it’s become a powerhouse. A few years ago, the company was famous mainly for its amusing “What’s in Your Wallet?” credit card commercials. But now, thanks to some smart M&A activity, Capital One offers a full suite of banking products and has found its place among the 10 biggest banks in America.

I signed up for a Capital One 360 checking account a few years ago. I was looking for a no-frills, no-fee online account with a debit card I could use while traveling abroad. A neighbor recommended it to me, and as part of a refer-a-friend deal, we each got $50. It seemed like a good idea at the time. And I think a Capital One 360 account can still be a smart decision.

What Is Capital One 360?

Parent company Capital One was created in 1995 when Signet Financial Corp. (which has since been gobbled up by Wells Fargo) spun off its credit card division, OakStone Financial, as a fully independent company. The company was renamed Capital One, and from the start it’s been led by CEO Richard Fairbank (an apropos name).

At the start, Capital One was what’s known as a “monoline” bank — that is, a bank that derives all of its revenue from one product. In this case, it was credit cards. Then Capital One flirted with auto loans and mortgage products for a few years.

But the real breakthrough came in 2012, when the company purchased ING Group’s ING Direct U.S. banking operations and rebranded them as Capital One 360.

Capital One 360 is mainly an online bank, but clients can find branches in eight states (Connecticut, Delaware, Louisiana, Maryland, New Jersey, New York, Texas and Virginia), as well as in the District of Columbia. In select cities, the company is also testing a Capital One Café concept that is a hybrid limited branch bank location and full-service coffee bar. That’s a bit bizarre but demonstrates that Capital One is leading the way when it comes to rethinking stodgy banking.

How Capital One 360 Works

However, stodgy or not, it’s banking that’s at the core of Capital One 360. The bank’s personal bank offerings include checking and savings accounts, along with certificates of deposit (CDs).

Although Capital One has brick-and-mortar locations, it’s first and foremost an online bank. In fact, you can receive only limited services for your 360 accounts at each branch.

That’s perhaps the biggest drawback to a Capital One bank account. Some consumers (myself included) prefer to be able to go into a local branch if they have questions and value their relationships with neighborhood banks.

But the technology is not totally foolproof. If you want to make a deposit, instead of filling out a slip and handing the whole kit and caboodle to a bank teller, you can use your mobile phone to take photographs of the front and back of your check. I have actually had trouble getting the focus and lighting to where Capital One 360 wants it, so I find this modern convenience a bit frustrating.

Still, if you’re not too bothered by the scarce number of branches and a few tech snafus, you might find Capital One 360’s banking offerings enough to make up for them.

360 Checking

Capital One’s 360 Checking accounts are interest paying, with rates currently at 0.20% (for an account with a balance less then $50,000), 0.75% (for $50,000 to $99,999.99) and 1.00% ($100,000 or more). This is a good deal higher than the national average (currently 0.06%).

However, some other online banks can meet or beat these rates. For example, Ally Bank pays an APY of 0.60% on accounts with daily balances over $15,000 (although Ally’s rate for a smaller balance is currently worse than Capital One’s, at 0.10%).

But what makes Capital One 360 accounts really attractive is the fact that they’re free. That’s right — Capital One charges zero fees for 360 Checking accounts. The bank will even throw in your first checkbook free.

You can use your 360 card to access nearly 40,000 Capital One or Allpoint branded ATMs across the country without paying any fees. And there’s no minimum account required to open or maintain a free account either.

Here’s what drew me to Capital One 360: The bank doesn’t charge a dime when it comes to using your debit card abroad. And you don’t even need to phone the bank to tell them you’ll be globe-trotting.

With all of these freebies, Capital One 360 is a good choice for the cost conscious. And for those who could use a little more consciousness when it comes to budgeting, the bank doesn’t charge any fees to use your overdraft line of credit. (You’ll pay only interest on the amount you borrow.)

MONEY

One cool product offered by Capital One is the MONEY account. This is a checking account just for teenagers. As with 360 Checking, there are no fees or required minimums to open or maintain an account.

MONEY accounts pay 0.25% APY in interest. And as the adult manager of the account, you’ll receive real-time text alerts to help you track your teen’s spending and know when their account balance is getting low.

Here at Investor Junkie, we think getting your kids to be responsible for money is a great idea. Here are some ideas to help them start investing, as well

360 Savings

Of course checking products are just one piece of the overall banking pie. Savings accounts can also play a big part in a bank’s performance.

Capital One’s 360 Performance Savings accounts pay a great APY — at 1.90%. And again, there are no monthly fees and no required minimum to open or maintain an account. Accounts are FDIC insured, and you can use the 360 app to deposit checks and check your balance.

Frankly, we’ve seen better rates. Over at fellow online institution CIT Bank (not to be confused with Citibank), you can earn an APY of 1.55% on accounts up to $250,000 and 2.15% for balances over that.

However, CIT Bank doesn’t offer checking accounts, so if you want to keep all of your banking needs under one roof (or rather, on one site), you might be content with Capital One 360.

If you’re interested in CDs, Capital One 360 offers terms from six to 60 months and APYs of 0.60% to 3.00%. (And, as with 360 Savings, 360 CDs are FDIC insured.) But we wouldn’t recommend going this route unless you’re looking for a CD that matures in 12 months or longer (2.70% and higher). Otherwise, you’d do better with the regular 360 Savings account.

Capital One 360 Savings Account

 

360 Performance Savings

With zero maintenance fees and no required minimum balance, Capital One 360 Performance Savings accounts could be a convenient place to park your cash.

Available For Taxable, IRA
Account Fees None
Savings Rates
  • Minimum Deposit $0
    — 1.90% APY

 

360 Kids Savings

Don’t want your kids to squander their allowance on junk food at the mall? Check out these custodial savings accounts with no fees and no minimum required balance.

Available For Taxable, Custodial
Account Fees None
Savings Rates
  • Minimum Deposit $0
    — 1.00% APY

Capital One 360 CD Rates

360 CDs

Capital One 360 offers a range of certificates of deposit (CDs) with varying terms and APYs.

Term Minimum Deposit APY
6 months $0 0.60%
9 months $0 0.80%
1 years $0 2.30%
18 months $0 1.90%
2 years $0 1.80%
30 months $0 1.70%
3 years $0 1.65%
4 years $0 1.65%
5 years $0 1.60%

Pros and Cons

Pros

  • No Fees — Capital One 360 charges no fees to open or maintain a checking or savings account.
  • No Required Minimum Balance — Capital One 360 requires no minimum balance to open or maintain a checking or savings account.
  • Mobile Checking — Bank from your couch with Capital One 360’s app.
  • No International Fees — Use your 360 card abroad without paying pesky fees.
  • Customer Service 7 Days a Week — Call into a customer service rep seven days a week, from 8 a.m. to 8 p.m ET.
  • Free Access to Nearly 40,000 ATMs — No matter where you are in the country, chances are there’s a free ATM nearby.

Cons

  • Rates Aren’t the Best — We’ve found higher interest rates for checking and savings accounts at other online banks.
  • App Isn’t Foolproof — Taking and uploading a photo of a check to deposit can be unwieldy, for example.
  • Few Local Branches — Branches are few and far between, and where you do find them, their services tend to be bare-bones.

Summary

So who’s a good fit for a Capital One 360 account? I’d recommend this banking option for anyone who is looking to do all of their banking online and who isn’t particularly interested in earning the best interest rates. And because there are no fees associated with opening or maintaining an account, it’s probably the best choice for the budget-conscious.

For those “interest rate junkies” out there, check out the other online banking options. You’ll find even better rates with competitors such as Ally and CIT Bank, depending on your needs.
Capital One 360 might also not be for you if you live distant from a brick-and-mortar location and want to be able to talk to a representative face-to-face.

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