Dedicated to Deposits: Deals, Data, and Discussion

Capital One High Yield Money Market Rises to 4.55%

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Capital One increased the APY on their money market accounts from 4.25% to 4.55%. They just introduced a new Capital One Direct website with new names for their two high yield accounts, so perhaps they did an extra rate bump for some more publicity. Their last rate hike was in early March when the APY increased from 4% to 4.25%.

Although the looks have changed, the products appear the same as before. The High Yield Money Market is really a high yield savings account which has no minimums and links to a checking account. I consider it a savings account and not a money market account since it doesn't offer limited check writing. Capital One uses the same online banking platform as EmigrantDirect. Capital One has the advantage of no limits in the number of checking accounts that can be linked rather than EmigrantDirect's limit of 2 per account.

If you want checks, the Money Market Account has limited check writing and ATM cards. However, there is a $100 minimum deposit to open and no interest is earned for balances under $100. But there doesn't seem to be a monthly fee. Unlike the other account, this one doesn't link to your external checking account and doesn't have online (ACH) money transfers. A comparison of these two accounts is available here.

Capital One also offers CDs, but like HSBC, the rates are low (even lower than the money market rate).

In my opinion, they should combine the two so that the one money market account would have both ACH transfer capability and check writing. A $100 balance requirement for earning an APY is much better than a balance requirement to avoid fees. 5% of $100 for a year is only $5. Monthly fees can be $5 or more a month.

Capital One also increased the rate of their special money market account for Costco customers. The new APY is 4.60% (up from 4.51%). With only a 5 basis point advantage over the regular money market account, it doesn't seem worthwhile when you consider this Costco version has a $5K minimum opening deposit requirement. There is still a $25 sign-up bonus for Costco Executive members when they open their first Money Market account or CD.


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