Everything you need to know about Capital One 360 online bank
If you’re looking to open a free checking or savings account with a range of great optional tools, Capital One 360 is a great place to start. The savings and checking accounts are free to open and offer higher than average rates, while not charging you monthly fees to manage those accounts.
With many product options and good customer service managing your money online could be a lot easier and cheaper too.
Savings, checking and app ratings
Capital One 360 offers interest checking, which is not usually common to a checking account that pays interest. However, this is exactly what this product does, plus it’s free to open. The rates for these accounts are as follows:
- 20% on balances up to US Dollar 49,999
- 50% for balances of US Dollar 50,000 to US Dollar 99,999
- 75% on US Dollar 100,000 or more
Some other services Capital One offers is that you aren’t required to pay an opening balance, you can open an account and start earning a little interest on the amount that you have.
They also provide a large range of ATM’s which are also free to access with a total of over 39,000 ATMs. However, this falls slightly short because their branch access can be a little limited. Most of Capital One’s 360 accounts are primarily available online, so you might not find a branch on every street.
Deposits, however, are available through bank transfers, mobile apps and direct deposits.
Capital One’s 360 performance savings account interest rates are great, with an APY of 1.80% which is more than the traditional national average. They also provide low fees with a minimum option, which means you don’t need to have a deposit to open a 360-performance savings account. Which also features no monthly maintenance fee required to keep the savings account active.
In addition to the low savings fees, the savings account also has multiple features that can assist you with managing and saving your money, making use of their automated savings and goal tracking tools. This way you can save money for your car.
Certificate of deposit (CD)
A CD is a product offered by banks where they give you a good interest rate for agreeing to leave a lump-sum with them for a period.
The bank offers CD terms from 6 months to around 5 years. If you don’t need to access your money for any reason for at least a year, the 12-month CD offers a much higher rate than savings accounts. Again, there are no minimum deposits. However, it is important to make sure you choose your term with consideration. Withdrawing your money before maturity would result in penalties.
While you can’t add funds to the account once you have opened it, Capital One does allow you to open to 50 CD’s at any given time.
One of the downsides with CD’s is below 12 months their rates are not competitive – you may be better off keeping your hard-earned cash in standard savings.
Capital One’s banking experience is also rather highly rated, with constant high app ratings. Their accounts rated in as one of the best mobile experiences for a bank today, with their app store rating at an average of 4.7 out of 5 stars. Their customer service ratings are also highly rated with multiple customer service channels available.
Customer service representatives are available by phone support seven days a week, including evenings. Chat is also always available for customers who are logged in to their accounts. They also support via Twitter too which is a great bonus.
However, with these great advantages in an online presence the downside is that their branch coverage is low, as they only have a few branches located around the U.S.
Checking account features
As mentioned before, Capital One 360 checking accounts have no minimum deposit, no minimum ongoing balance and no service fees, some of the other features include:
- Accessing your money fee-free at more than 39,000 Capital One or Allpoint ATMs.
- No foreign transaction fees when you use your debit card abroad.
- Online bill payment options, with one option for automatic payments.
- Deposit checks from anywhere by taking a photo on your phone.
- First set of checks are free.
One of the bigger perks of these checking accounts are the overdraft options. Instead of charging you automatically for your overdrafts, you have some options. Some of the choices available are:
- Auto decline charges you don’t have the funds to cover.
- Link a Capital One 360 savings account to cover the charges.
- Use their one business day grace period to add funds before being charged US Dollar 35.
- Use their Overdraft line of credit, where Capital One will cover the overdrawn amount for you. You will then be charged interest until you put the funds back.
Checking account teaches money management for teenagers
Another fantastic feature that Capital One provides is that their money checking accounts are specifically designed for teenagers to help them learn about money management. As a parent you and your teen will essentially be joint account holders.
Which allows them to make their own money decisions. You will be given your own username and log-in details so you as the parent can check up on their purchases.
Some of the options Capital one provides this checking account with includes:
- Get a debit card in their own name.
- Earn a little bit of interest.
- Make mobile check deposits.
- Transfer money.
- Set up direct deposits.
- Get text alerts and emails.
These accounts offer no minimum deposit requirements, no account opening fees, and no service fees. When you child turns 18, he or she can roll over this account into a 360-checking account.
A few other optional accounts are also provided by Capital One, such as kids saving accounts. With Capital One’s kids savings account, you can help your children get into the habit of savings, just like the teen variant. It’s pretty much the same; the account is a joint account between the parents and child.
Although, they will be allowed to sign in and view their balance, however, the parent is the only one with actual authority to move money in and out of the account.
The kids savings account offers a very decent APY rate, so children have the option to watch their money grow. This also doesn’t include monthly service fees and no minimum balance.
One of the better upsides to using Capital One 360 services is that they offer free overdraft transfers straight from your savings account or some credit to help cover an overdraft. Just like with their monthly fees not many banks don’t charge for this service.
Along with their free transfers they also provide an optional next day grace program, which essentially means if you don’t want your transactions to be declined, signing up for their next day grace program gives you the option that the bank will consider approving an overdraft transaction without a transfer.
However, there are two versions, standard and plus. Which offer slightly different services based on which transaction types can be covered.
You will have one business day to make a deposit large enough to bring your account balance up to a positive rating and avoid the overdraft fee. The downside to this is the price of overdraft fees; the bank charges US Dollar 35 overdraft fee per item up to four items a day.
Many banks offer fewer options for dealing with overdrafts so you will need to decide what is more important.
The Capital One 360 money market has no minimum deposit and no fees, you can set up automatic savings plans or just deposit your money manually. There are two interest tiers here, depending on your balance. If you have US Dollar 10,000 or more, you’ll receive a better rate with the money market than with the savings account.
However, the 360-money market doesn’t offer check writing. You can only transfer funds online between Capital One accounts or external accounts.
Saving for retirement
The 360 IRA’s offer a good way to save for retirement and start earning interest on your balance immediately. The money put away in an IRA is also FDIC-insured up to allowable limits, and you don’t pay monthly fees which you are building your savings.
IRA accounts have good tax benefit as you save for retirement. The APY is the same as a savings account but lower than what you could get with brokerage IRA account, however it is the better option for those who prefer stability for example, senior citizens who don’t want to risk their investments.
The 360 IRA savings account has two options: traditional or Roth IRA.
Traditional IRAs and Roth IRAs differ in a few ways, more particularly in their tax treatment. Contributions to Traditional IRAs are tax-deductible, however, earnings within the account aren’t taxed until the funds are withdrawn.
Contributions to Roth IRAs are made on an after-tax basis, meaning both earnings and eligible withdrawals are tax-free.
You can also determine your tax bracket.
You also have the option of choosing an IRA CD, which also has tax benefits. If you open a 360 IRA CD, you’ll also automatically get a 360 savings account. You also have the option to use it to make contributions to receive interest disbursements or roll over funds. When your IRA CD matures over time, you can transfer it to your IRA savings.
Some Pro’s about Capital One
Now that we have discussed some of the products and services, let us turn to the pros and cons about this online bank.
- There are no monthly fees – this allows you to meet your savings goals faster without worrying about paying service fees.
- You can have as many as 25 savings accounts – for multiple savings goals.
- There is no minimum required balance on deposit products – if you choose to, you can open an account with as little as US Dollar 1. All other accounts offer the same interest and no fees, no matter the balance.
- You have access to your account 24/7 – you can access your account on your own computer or even your mobile device at any time of day or night.
- You aren’t required to pay overdraft fees on your checking account – many checking accounts charge US Dollar 35 per overdraft however, Capital One 360 gives you options and in some cases second chances.
- You have the option to make mobile deposits – with a smartphone, you can make mobile deposits in a matter of minutes. All you would need is the Capital One mobile app and access to a camera.
- You have access to transferring money to friends and family – using Zelle within your Capital One mobile app you can send money to anyone, even if they don’t bank with Capital One.
- You can get in person help in select cities – many online only banks don’t offer in-person support.
- You can get access to phone support 7 days a week – Capital One 360 offers customers support from 8AM to 11PM, 7 days a week to help you with whatever you need.
- Less money flexibility – Capital One’s Money Market account doesn’t come with check writing privileges or an ATM card.
- You may experience long hold times on deposited checks – online banking does provide its challenges, which includes held funds.
- You cannot assign beneficiaries – Capital One 360 does not allow you to designate a beneficiary on their bank accounts.
- You may wait awhile to talk to a customer service representative – their call times sometimes have been known to be rather lengthy, which for some can be rather frustrating.
- You can’t open an account at their branch – because they are an online only bank, you can only open 360 accounts online.
- You want a business savings account – Capital One 360 is an online only bank for consumers. If you would like to open an account for your business, you will need to visit a Capital One branch to open a business savings account.
The bottom line is that Capital One 360 is a very viable option for those who want the higher interest rates of an online bank without all the included fees. You’ll have to have some patience when waiting to access your funds or when you need phone support though.
However, if you can independently manage your finances and are good with tech, this bank could be the bank for you.