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Capital One's SmartCents - Comparison to Bank of America's KTC and Other Savings Programs


Capital One Direct Banking
Capital One Bank's SmartCents is a new savings program that is very similar to Bank of America's Keep The Change Program. Below are the main features of SmartCents:
  • Every time you make a debit card purchase or pay a bill online, 50 cents of your money is transferred from your checking to your savings
  • Capital One matches 100% of your eligible SmartCents transfers made within the first 3 months, and 5% after that (up to $300/year)
  • Get $15 for your first direct deposit plus an extra $15 for your first online bill payment
It requires that you have both a Capital One SmartCents checking and a savings account. However, according to the disclosure, "eligible savings accounts include personal savings and personal money market accounts offered by the retail branch bank." So this doesn't include the Capital One's Direct Banking savings accounts which offer rates as high as 1.75% APY as of 9/27/09 (see account review). The branch savings accounts have lower rates and two of the three have minimum balance requirements to avoid a monthly fee. At least the SmartCents checking has no monthly service fees or minimum balance requirements.

Another downside to SmartCents is that it's currently not available nationwide. It's only available at Capital One branches. You can apply online, but you're required to visit a branch to complete the application process. Branches are located in Connecticut, Louisiana, New Jersey, New York, Texas and Virginia.

Some important small print includes:
  • Bonuses are for new to bank checking customers only
  • New to bank checking customers receive a 100% match on all eligible automatic SmartCents transfers made within the first 3 months, then 5% thereafter (sounds like existing checking customers may not receive the 100% match)
  • Matching for online bill payments is limited to 10 per month

Comparison to Bank of America's Keep the Change Program

Both the BofA's KTC program and Capital One's SmartCents offer 100% match in the checking-savings transfers for the first 3 months. After the first 3 months, it goes down to a 5% match. The matching is maxed at $250 per year for the KTC and $300 per year for SmartCents. For both programs, the matching will only be significant for the first 3 months.

In BofA's KTC program, the money transferred from the checking to savings can be as high as 99 cents. They round up your purchase to the nearest dollar amount and transfer the difference from your checking account to your savings account. For Capital One's SmartCents, the amount for each transfer is fixed at 50 cents. One advantage of SmartCents is that transfers can also be initiated by online bill pay and recurring pre-authorized payment. However, the matching is limited to 10 bill payments per month.

Other Savings Programs

The best savings program in my opinion is Wachovia/Wells Fargo's Way2Save program (see account review). In the Way2Save program you can easily make about $80 more than if you just had an online savings account during one year, and this doesn't require any debit card usage.

These savings programs are becoming popular. Earlier this month I reviewed US Bank's new START program. As I mentioned in that post, you have to be careful with these programs. The benefits of these programs can be erased if you have any overdrafts with your debit card. If you have sizable savings and want to profit for debit card usage, you'll be better off with high yield reward checking accounts.

Related Pages: New York, Louisiana, Virginia, Capital One Direct Banking, New Jersey, Texas, checking account, savings account, Connecticut

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Comment #1 by Alex Portman (anonymous) posted on
Alex Portman
This SmartCents program is utter rubbish and its only goal is to be a marketing tool to discourage consumers from choosing one of Capital One's competitors that have a similar useless program (such as BofA's Keep the Change). Here's the SmartCents approach to saving: spend $100 on dinner out and pay with your debit card, and then rejoice that 50 cents will be added to your savings account for the transaction. Oh, if it's within the first 3 months, rejoice further because Capital One will match 100% of 50 cents, which is 50 cents. In total, you save $1.

Here's the realistic approach to saving: set a budget, which amongst other things says that you don't spend more than $35 on a dinner (as an example). You thus have $65 that you could save relative to the earlier example. If you wish to save, there are great personal finance guides out there that lay out effective techniques to build your wealth. SmartCents will get you nowhere. I should mention that I generally like Capital One and I bank there. My experience with them is that they treat their customers fairly but telling people that SmartCents is a good way to save is a disgrace.

Comment #2 by cap1 customer (anonymous) posted on
cap1 customer
Very good info...I only set it up for the beginning to get the 100% matching benefit...after 3 months I switched to the Rewards Program. Like you said, SmartCents is not an effective saving method.

Rewards isn't a savings method but you can find some pretty good deals from companies you often buy from. Useful to me