Dedicated to Deposits: Deals, Data, and Discussion

5.25% 60-Month / 4.50% 24-Month CD at Capital One Branches


Capital One Direct Banking
Update 11/26/08: The CD rates have gone down. Please check the bank's website for the latest rates.

Capital One Bank is offering some very competitive CD rates at its branches that are higher than its Direct Banking CD rates. These branch CD rates include 5.25% APY for 60 months, 4.50% APY for 24 months and 4.00% APY for 12 months. These rates are higher than the rates for similar CDs at Capital One Direct Banking and Capital One / Costco Direct Banking. However, Capital Direct Banking has the best deal for a 7-year CD with a yield of 5.50% APY (5.55% APY at the Costco version).

Branches also offer Flex CDs which allow rate bumps during the CD term if rates go up. The 5-year Flex CD has a competitive 5.00% APY, and this allows 2 rate bumps. It's questionable if this feature is worth the lower rate. Even if there's a rising-rate environment, it doesn't mean that the rate will go up for the specific CD that you have. So you may never get a chance for a rate bump.

There's an online application for these CDs, but it states that "you will be required to visit a branch office in Texas, Louisiana or our headquarters branch in McLean, Virginia to complete the process." However, I've seen these same CD rates advertised in today's New York Daily News. The ad is available online here (update: the ad is no longer available online). The small print of the ad states that this offer is available in New York, New Jersey and Connecticut. Refer to the Capital One branch locator to see if there's a Capital One branch near where you live.

One thing a little odd about Capital One CDs is the early withdrawal penalty. It's not a simple 6-month interest penalty. However, the penalty of the branch CDs appear to be different than the Direct Banking CDs. According to the terms of the branch CDs, the early withdrawal penalty for CD terms over 12 months to 60 months is $25 plus 3% of the withdrawal amount. The 3% would equal about 7 months of interest for a 5.25% APY. This is more straight forward than the Direct Banking CD penalties which factor in the Economic Replacement Value to determine the penalty of long-term CDs (see post).

FDIC and Financial Info

Capital One has two FDIC entities, however, I've been told that new accounts will be FDIC insured through Capital One, N.A. (FDIC Certificate # 4297). It's a large bank with $108.5 billion in assets and $72.5 billion in deposits based on 6/30/08 data. Capital One's rating at Bankrate is 3 stars (performing) based on 6/30/08 data. The rating at BauerFinancial continues to be 3.5 stars (good) based on 6/30/08 data.

Edit: Corrected CD term for 4.50% APY.

  Tags: New York, Louisiana, Virginia, CD rates, Capital One Direct Banking, New Jersey, Texas, Connecticut

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Comment #1 by Anonymous posted on
I see the 4,5% is a 24 month not 18.

Comment #2 by Banking Guy (anonymous) posted on
Banking Guy
Thanks. I think I confused the Direct Banking 18-month CD with this.

Comment #3 by Anonymous posted on
RE: Capital One's Bump CDs

During the last Fed raising rate cycle, I got suckered into one of their 5 yr. bump CDs. After the intial juicy rate, the rates versus the non-bump 5 yr CDs did not go up that much. In fact, the rates turned out to be a little lower the non-bump CD.

Comment #4 by Hal (anonymous) posted on
Just visited the branch in Branford, CT (the old Superior Savings that was bought by Capital One) and the CSR said they cannot access Capital One Online accounts, which was how I was hoping to fund the CD. Pretty silly.

They're offering the 5.25% 5-year rate. Rates typically change on Wednesdays.

Thanks Banking Guy for a great site!

Comment #5 by Anonymous posted on
You should open a Rewards checking account, use online banking to transfer money to that checking account, and then you have a source of funds for your CD. Direct Bank is online or by phone only, as it says when you open the account.

Comment #6 by Anonymous posted on
We have several accounts with Capital One. They have some internal issues that make them unreliable and you need to proceed with caution. However, their interest rates are very hard to resist.
The most striking example of a problem was their cashing a check from my business, which has a completely separate tax identification number. They deposited the check into a separate personal account.
Insult to injury, they investigated and said they had made a mistake but could not reverse the transaction and I would have to “deal” with it. Had I not been an attorney and able to “deal” with the misappropriation of funds, it would have been a very difficult situation.
My point is, if there was any question on what account to deposit a check, they should have clarified the situation, not create a problem by their own error. Their rush to acquire deposits is making them very careless.