Capital One High Yield Money Market Rises to 5.00%

Capital One increased the APY on its money market accounts from 4.75% to 5.00%. The two money market accounts are the High Yield Money Market account (the no-minimum savings account which provides good ACH linking) and the Money Market account (has a $100 mininum, check writing but no ACH).

This Money Market Account is a good choice for people who want high yield and check writing with a low minimum balance. There's only a $100 minimum to open the account. If the balance falls below $100, you earn no interest but there are no monthly fees. Most money market accounts with check writing have minimum deposit or balance requirements of over $1K. The other two good alternatives are GMAC Bank which has a $500 minimum and UmbrellaBank which has a $1K minimum. The only problem with this Cap One Money Market Account is that it doesn't have an ACH transfer system to allow online bank-to-bank transfers. I find it strange that ACH is offered in the no-minimum High Yield Money Market Account, but that account doesn't offer checks. They should just combine the two accounts into one with both check writing and ACH linking.

Although Capital One hasn't been a rate leader, it has done a decent job at staying competitive. The last rate hike was just 3 weeks ago on June 28th when Capital One increased the rate from 4.55% to 4.75% APY.

Capital One's Costco Money Market account just had a rate increase last week from 4.82% to 5.08% APY. This Costco money market account averages about 0.20% over the standard money market account rate. So it's likely that the rate will increase over the next few weeks. The special $50 sign-up bonus for Costco Executive members is still available (see post).