Capital One 360 Review - Pros and Cons of Using Capital One 360 (Savings, Checking, CDs)
8 weeks ago, MarketConsensus News published its annual review report on the “best banks with no fees that offer high yield accounts ”.
The article below provides a more detailed review of Capital One 360, which was included on our best banks report.
As part of our overview, we are presenting the pros and cons that we learned about from our analysis of Capital One 360 bank.
Capital One 360 Bank Reviews – Pros, Cons, Rates, Concerns and Analysis
- History / Acquisition
- Consumer Concerns over Acquisition
- Who uses Capital One 360?
- Products and Services
- Promotions / Rewards
- History / Acquisition
In 2012, Capital One continued its global strategy of “growing by expansion” when it acquired ING Direct USA for $9 billion from ING (Netherlands). ING Direct was the largest online bank in the US, with no physical branches.
ING, the largest Dutch banking firm, had been ordered by the European Union to sell its U.S. unit as a condition of getting a government bailout during the financial crisis.
As part of the acquisition negotiation, Capital One was required to change the ING Direct name, leading to it being renamed Capital One 360 (also referred to as Capital One Bank).
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- Consumer Concerns Over Acquisition
The news that Capital One was acquiring ING Direct was met with customer uproar.
Customers were concerned that ING Direct would be turned into “just another bank” with monthly, servicing and other types of fees and that the high interest yields would no longer exist.
This was an understandable concern as Capital One was more known for its credit card portfolio of products, and ING Direct customers did not know what to expect from this new owner.
Thus far, all of the concerns have proven to be unfounded, as Capital One has maintained all of the benefits previously offered by ING Direct and actually introduced more consumer friendly services.
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- Who Uses Capital One 360?
From a business model perspective, Capital One 360 is geared towards a more internet-savvy and financially aware consumer.
- Products and Services
The bank provides a wide array of banking products including:
- High yield savings accounts
- Free checking
- Brokerage accounts for individual investors
- Certificate of Deposits
- Mortgage loans
- IRAs / Rollovers / 401Ks
- Business accounts
- Kids Savings Account - teach kids the benefits of saving while earning interest.
- 360 Savings Rate: 0.75% Annual Percentage Yield
360 rate vs. average Money Market / Savings Accounts
- 360 CD Rates
- Pros – High Yield Capital One Savings Account & Free Checking
- User-friendly website interface
- No monthly fees
- No minimum balance
- Competitive high yield interest rates
- No foreign transaction fee
- Deposits are insured by the Federal Deposit Insurance Corp. (up to $250,000)
- 38,000 fee-free Allpoint ATMS and 2,000 Capital One ATMs
- Deposit checks via a smartphone app or upload a check image from your computer
- Great customer service
* All rates / yields shown on this article are accurate as of 9/29/2013 and are subject to change at any time without notice
Compared to a bank like Barclays Online Bank, with thousands of consumer complaints, Capital One 360 only had a couple of bad reviews or complaints that we identified.
Some might regard these as just minor issues.
The first concern we identified was the insufficient number of physical branches where you can walk in and have an actual person resolve any issues you might have.
The type of consumers that Capital One 360 caters to rarely ever needs to visit a physical branch, as most banking transactions can be done online, via phone or ATM.
However, there are consumers out there that like the convenience of a physical branch, and would prefer to see easily accessible local Capital One Bank branches.
Note, though, that Capital One 360 and other high yield paying banks are able to pay out such high yields because of their unique banking business model: they “don't operate many bank branches, don't hire nearly as many employees, rely heavily on automated online tools, and pass along some of those savings as additional interest to their depositors.”
Other negative reviews included: minor connection issues (e.g., website undergoing maintenance) and Capital One’s ShareBuilder Brokerage account not providing sophisticated trading tools, compared to other top online brokers.
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- $50 Bonus: Earn a $50 bonus by making a total of 3 Debit Card purchases within the first 45 days.
- Referral Program: Get $20 for every friend or family that you refer (up to $1,000).
- Blogger Contest: Share your saving experience with Capital One 360 and be entered into a drawing for a chance to win $100.
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