Capital One 360 Review: Comprehensive Online Banking Option

Understanding the various banking products available can empower you to make informed decisions about your finances. One option that has garnered attention in the online banking landscape is Capital One 360, a full-service online bank that provides a range of financial services. This article delves into everything you need to know about Capital One 360, including its offerings, unique features, and the overall advantages of banking with them.

Capital One 360 emerged from the acquisition of ING Direct in 2011, a move that raised concerns among ING Direct's loyal customer base. However, Capital One has not only preserved many of the beloved features of ING Direct but has also introduced new and innovative products that enhance user experience. As a division of Capital One, which was founded in 1988 primarily as a credit card issuer, Capital One 360 has evolved into one of the largest banks in the United States, boasting over 45 million customer accounts.

Capital One 360's main products

Capital One 360 offers a variety of financial products that cater to different banking needs:

• 360 Checking
• 360 Savings
• Kids' Savings Account
• Home Loans
• Investing Accounts
• Retirement Accounts
• Business Accounts

These products are accessible through both internet and mobile platforms, ensuring that customers can manage their finances anytime and anywhere.

Exploring 360 Checking

One of the standout offerings from Capital One is the 360 Checking account, which provides a no-fee checking solution with no minimum balance requirements. This feature is especially appealing in a market where such accounts are increasingly rare.

The interest rates associated with the 360 Checking account are structured in tiers:

• Balances from $0 to $49,999.99 earn 0.20% APY.
• Balances from $50,000 to $99,999.99 earn 0.80% APY.
• Balances over $100,000 earn 0.85% APY.

Interest is accrued daily based on the account balance, making it a beneficial option for those who maintain higher balances. Customers can conveniently deposit checks through mobile uploads or opt for direct deposit. Additionally, the account includes a free MasterCard debit card, which provides access to over 38,000 AllPoint ATMs nationwide.

While this checking account is largely fee-free, there are some exceptions that customers should be aware of:

• Overdraft line of credit fees
• Overnight delivery fees for checks and replacement cards
• Fees for rejected checks and stop payments
• Foreign transaction fees (although Capital One does not charge these, MasterCard may)

It's worth noting that customers are limited to one checking account per person, and Capital One reserves the right to check credit ratings when processing applications.

Understanding 360 Savings

The 360 Savings account is designed to encourage saving through its flexibility and easy-to-use features. Similar to the checking account, it has no minimum balance requirement and no associated fees. This account pays a variable interest rate, contributing to the overall appeal for savers.

Depositing funds can be done through direct deposit, mobile check uploads, or by mailing a paper check. However, initial deposits come with a waiting period of 10 business days for withdrawals to become available, while subsequent withdrawals take about 5 days.

Capital One 360 provides unique tools that promote saving, including:

• Up to 25 individual savings accounts, which can be nicknamed for specific goals such as vacations or home purchases.
• The "My Savings Goals" program, which allows users to track their savings milestones and celebrate achievements.

Moreover, Capital One 360 offers Certificates of Deposit (CDs), although current rates may be lower than those for the savings account, suggesting that keeping funds in savings could be more advantageous.

Kids Savings Account: A Learning Tool for Young Savers

The Kids Savings Account mirrors many features of the standard 360 Savings account, making it an ideal introduction to banking for children. There are no minimums or fees, and the account earns a variable APR, encouraging youngsters to save.

Children can open multiple savings accounts for different purposes and utilize the My Savings Goals program to learn about financial planning. Parents can monitor their children's accounts easily, ensuring a collaborative approach to saving.

Upon reaching the age of 18, the Kids Savings Account automatically transitions to a standard 360 Savings account, providing a smooth transition into adult banking.

Other products offered by Capital One 360

Beyond checking and savings accounts, Capital One 360 offers a comprehensive suite of financial products, including:

• Home Loans
• Investing Accounts
• Retirement Accounts
• Business Accounts

These offerings allow customers to consolidate their banking, lending, and investment needs within a single institution, enhancing convenience and accessibility.

Home loans: Options for every buyer

Capital One provides a range of mortgage options, including both fixed and adjustable-rate mortgages. Their rates are competitive, and they boast closing costs that are approximately 41% lower than the national average. For instance, closing costs on a $200,000 mortgage average around $2,415.65.

Customers can secure loans covering up to 80% of the home's selling price, making homeownership more attainable for many.

Investment accounts tailored for growth

Capital One 360's investment platform, ShareBuilder, offers an accessible avenue for investing. There are no minimum balances required to open the account, and customers can effortlessly transfer funds from their 360 accounts without incurring fees. Online trades are available at a rate of $6.95 per transaction.

For families, Capital One 360 offers the opportunity to set up custodial or educational savings accounts for children, allowing for investment in stocks, mutual funds, or ETFs without a minimum investment requirement.

Retirement accounts: Planning for the future

Capital One 360 assists customers in managing their retirement savings through Individual Retirement Accounts (IRAs). Users can choose between a Savings IRA for investing in CDs and savings, or an Investment IRA for stocks, mutual funds, or ETFs. Both options come with no account fees or minimums.

Business accounts for entrepreneurial needs

The business savings account at Capital One 360 offers similar benefits to personal accounts, combining the ease of online banking with attractive interest rates. Additionally, business CDs are available that mirror the rates of traditional CDs. Business owners can also take advantage of ShareBuilder to set up a 401(k) plan that suits their business structure.

As an entirely online bank, Capital One 360 can afford to offer higher interest rates compared to traditional brick-and-mortar institutions. Their FDIC insurance ensures that customers can earn competitive interest on their savings without taking on additional risks.

Assessing the pros and cons of Capital One 360 checking

While Capital One 360 offers a range of benefits, it’s essential for potential customers to consider both the advantages and disadvantages:

• Pros: No monthly fees, competitive interest rates, user-friendly mobile app.
• Cons: Limited customer service hours, online-only access may not appeal to everyone.

Capital One 360 remains an attractive option for those looking for a comprehensive online banking experience that prioritizes convenience and savings growth, making it a bank worth considering for your financial needs.

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