Capital One Increases Rates on its Online Money Market Accounts
Feb 22, 2008 - 4:20 PM by Ken Tumin
Capital One increased the yields on its Costco Money Market from 5.00% to 5.20% APY and on its High Yield Money Market (HYMM) from 4.75% to 5.00% APY. This puts CapOne's rates where they were before their rate drop in late April. From January to April, they had these same 5.20% and 5.00% yields.
These money market accounts have several nice features including free checks and no monthly fees regardless of balance. The Costco one does require an initial deposit of $1,000 and you must maintain a balance of $100 to earn interest. If you're an executive Costco member, you can receive a $50 signup bonus if you deposit $5K within 30 days of account opening.
Thanks to the reader who mentioned this rate update in the comments of the finding deals post. The reader also mentioned that they're offering an extra dollar per month for every extra $1,000 deposited to an existing account (through the end of August). Customer service is only available up to 8:00pm EDT, so I'll have to call tomorrow for more details.
Update 8/2/07:
I just called CapOne's customer service, and I was told that the promotion which you receive $1 for every $1K deposited in August is targeted to select existing customers. So that's why it's not listed on the website.
As one of the commenters mentioned, CapOne's ACH transfer system has some nice feature, but the transfer time is slow. Here are some details I learned from my call:
- You can link up to 10 external accounts that can be used for fund transfers.
- There's a maximum deposit limit of $250K/day on in/out ACH transfers
- You don't have to maintain your Costco membership to keep the Costco Money Market Account
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Anonymous - #1, Wednesday, August 1, 2007 - 10:01 PM
As a long time customer of CapOne, I have been using CapOne as one of my 'hub' accounts for moving funds from one HY account to another but its features of allowing unlimited external account links and generous limit per transaction are getting competitions from other institutions such as GMAC, Fidelity, E-trade who are offerring the same benefits but with much more efficient ACHs regarding transfer time between financial institutions.
So for CapOne, either pony up with a much more appetizing rate than the norm (5-5.20% is not going to do it) or speed up your ACH if there is hope of attracting your deserting customer base from coming back.
Anonymous - #2, Wednesday, August 1, 2007 - 10:13 PM
Where did you see the offer of $1 for deposit of 1K?
Banking Guy (anonymous) - #3, Thursday, August 2, 2007 - 7:56 AM
Anonymous #1, Thanks for sharing your experiences with CapOne. Looks like they may be trying to lure back deposits by using that $1/$1K deposit promotion. It's probably not enough.
Anonymous #2, Looks like that $1/$1K deposit promo is only for certain existing customers. So that's why it's not listed on the website. I've updated the post with this info.
scott (anonymous) - #4, Thursday, August 2, 2007 - 8:02 AM
Looks like they are getting desperate, I found out about this new rate by a "Courtesy" call they made to me yesterday. Use to keep large amounts with them but now only have a little over a hundred.
Anonymous - #5, Thursday, August 2, 2007 - 10:15 AM
Although not related to their Money Market promo, I recently got their credit card that offered a $50 statement credit with one purchase as well as 1.25% cash rewards on all purchases (the .25% being credited once a year - but still.) This card has increased my cash rewards for this type of card. I found out about this offer HERE! Thanks Banking Guy!
Banking Guy (anonymous) - #6, Thursday, August 2, 2007 - 5:50 PM
Scott, I did find it strange that CapOne would drop the rate and then reverse it after a few months. It does seem they may have lost too many deposits with that rate cut.
Did they offer you that $1/$1K incentive? I didn't get the details of this promo, so I can't say if it would pay better than FNBO Direct's 6%.
Anonymous, thanks for your support. For others interested in that CapOne credit card bonus, here's the link to my post.
Anonymous - #7, Thursday, August 2, 2007 - 11:14 PM
They came up with the $1 per month per extra $1,000 in June. I brought my account up near the FDIC limit. It took till 7/11 to get the bonus, but with the base rate at 5% now, plus the extra, that is around 6.2% now. That is even better than the FNBO rate of 6%.
Dont know how they selected who to send the offer to. They sent me both an email and a hard copy advertisement. I did have significantly more $$$ with them when their rates were higher and did pull most of the money when they cut the rate (just like I did with ING).
Anonymous - #8, Friday, August 3, 2007 - 2:49 PM
i called cap 1 about the $1 per ik add on bonus .it does not cover the castco accts per the csr.
Anonymous - #9, Sunday, August 12, 2007 - 2:44 AM
Does Capital one have the same credit troubles as Countrywide bank does?
Anonymous - #10, Thursday, September 20, 2007 - 10:37 PM
In agreement with Post #1. I am leaving this one for GMAC and Flagstar because the ACH transfer to and from CapitalOne is painfully slow.
Mike (anonymous) - #11, Friday, November 16, 2007 - 12:13 PM
It appears that Capital One has cut the rate on both its regular and Costco accounts by another 10 basis points - now 4.4 and 4.6 APYs.
Anonymous - #12, Wednesday, May 7, 2008 - 3:15 PM
You should buy put on COF based on their poor+++ services. oh man, never chose a bank like this before. Can't believe it.
Boby (anonymous) - #13, Friday, July 25, 2008 - 8:12 AM
Hi. I should say your blog is very interesting. Also I think it is very informative. I have been looking for a good band and could not decide what to choose. Just as I stopped my choice on Capital One Bank I bumped into this great site www.pissedconsumer.com and your blog as well. Now I can safely say I will not have any business with this bank.
Boby (anonymous) - #14, Friday, July 25, 2008 - 8:12 AM
Hi. I should say your blog is very interesting. Also I think it is very informative. I have been looking for a good band and could not decide what to choose. Just as I stopped my choice on Capital One Bank I bumped into this great site www.pissedconsumer.com and your blog as well. Now I can safely say I will not have any business with this bank.
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