Update 11/27/09: InterestPlus Online Savings rate has fallen to 1.65% APY. MMA rate has fallen to 1.40% APY.
Capital One Direct Banking for Costco Members has added a new account called InterestPlus Online Savings. It's similar to the Online Savings Account (OSA), but it has a few advantages:
- 10% quarterly bonus on interest earned when you maintain a minimum average balance of $15,000 in your savings account each month
- Top rate applies to balances of $5,000 or more (compared to $10,000 with the OSA)
- Top rate is currently 5 basis points higher than the OSA
The top InterestPlus Online Savings rate is 1.85% APY as of 7/19/09. Like the OSA, the InterestPlus account has no fees, and it has an ACH bank-to-bank transfer service.
If the APY stays at 1.85%, the 10% bonus would make the effective APY equal to about 2.04%. The 10% bonus appears to be another way to encourage customers to maintain a larger balance. I guess the 10% bonus sounds better than just having a new $15K rate tier.
I don't see this InterestPlus account available for non-Costco customers at Capital One's Direct Banking page. In the past, Capital One's standard Direct Banking offered the same accounts as their Costco accounts but just with slightly lower rates. Another plus with the Costco accounts is that there's a new-account bonus:
Executive Members receive a $60 member incentive and Gold Star and Business Members receive a $20 member incentive on your first Direct Banking account of any kind opened through the Costco program with at least $5,000 deposited into the account in the first 30 days after opening.
I described many details of Capital One's accounts including their ACH transfer service in this May 2008 post. The main downside seems to be Capital One's slow ACH transfer speeds. Readers have reported that it takes at least 3 business days to complete. The money is pulled from the source account the day after you initiate the transfer, and it won't post until 3 business days later. Interest is lost during this time.
Another potential downside with Capital One is the customer service. Several readers have reported various problems in my May 2008 post and in this April 2008 CD post.
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 $118 billion in assets and $83 billion in deposits based on 3/31/09 data. Capital One's ratings for safety and soundness are strong: 4 stars (sound) at Bankrate.com and 3½ (good) at BauerFinancial. Both ratings are based on 3/31/09 financial data.
For other high yield savings accounts, please refer to my weekly rate summary.