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Capital One Update: New $50 Bonus, Faster Incoming ACH Transfers, CD Rates Up

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Capital One Direct Banking
Capital One Direct Banking has a another $50 promotion for opening a new account. Below are the details listed on its promotion page as of 10/08/09:
  • Savings account or money market account must be opened online by 11/25/2009
  • This account must be your first account with Capital One Direct Banking
  • At least $10,000 must be on deposit on 11/25/2009
  • Offer code SAVER50DF must be used
  • Account must remain open 4-8 weeks after 11/25/2009 during which time the bonus will be deposited into your account
  • Minimum initial deposit amount is $1
I found this promotion being advertised, and I called Capital One yesterday for additional details. According to the CSR, it's available nationwide. If you already have a Capital One account but it's not with their Direct Banking unit, you can still qualify. You only need to have the $10,000 balance on 11/25/2009, so you can fund it with a little money and keep the money at a better paying account until around November 25th.

As of 10/08/09, the Online Savings Account has a rate of 1.60% APY for balances of at least $10,000 (0.60% for below). Minimum initial deposit is $1, and it has no monthly service fees. I have more details on this account in this review.

The High Yield Money Market Account pays 1.20% APY on all balances. Like the savings account, it has no monthly service fees. The advantage of the money market is that it offers limited check writing (checks are free) and an ATM card.

Faster Incoming ACH Transfers

The main downside with these two accounts had been a slow ACH transfer system. Readers have reported that it takes at least 3 business days to complete an electronic transfer with at least 2 days of losing interest. However, last month Capital One made improvements to their ACH transfer service. When you initiate an inbound ACH transfer at Capital One, the transfer will complete the next business day. A transfer can be scheduled up to 7:00PM Eastern Time, and it will post the following business day to both the Cap One and external account.

Unfortunately, Capital One has not yet made improvements to outbound ACH transfers. When you initiate an outbound ACH transfer at Capital One, it'll still take 3 business days with 2 business days in which the money isn't earning interest. According to the CSR, they're looking to improve this in the future.

Besides the slow outbound ACH transfer speed, Capital One's ACH service has many nice features:
  • High ACH transfer limit per day: $250,000 in or out
  • Allows up to 99 linked external accounts
  • External links are set up online with verification via trial deposits
For more details of the savings account and money market account, refer to my Capital One Online Savings Account review..

Capital One's CD Rates Went Up

For the last several months, Capital One's CD rates have been very low (i.e. 1.50% 10 year CD). However, I just noticed that some of the rates have gone up substantially. The two that are now fairly competitive are the 2-year CD with a 2.30% APY and the 4-year CD with a 2.95% APY. These rates are listed at the Capital One's CD rates page as of 10/08/09.

Higher Rates and New Account Bonus for Costco Members

Costco members can get higher rates and a new-account bonus at Capital One. Details are described at the Capital One/Costco Direct Banking page. For those who plan to keep a balance of at least $15,000, the InterestPlus Online Savings Account is a good deal (see account review).

Capital One's SmartCents Program

For those who live near a Capital One branch, you can sign up for Capital One's SmartCents program. This is a program like Bank of America's Keep the Change program which requires the use of the debit card (see post).

Financial/FDIC Info

Capital One has two FDIC charters, and these two have different Bankrate ratings (based on 9/30/08 data):
I've been told by a Capital One banking rep that new deposits are held by Capital One, N.A. The FDIC shows Capital One, N.A. to hold most of the deposits, so this seems to be correct.

Other Competitive Bank Bonuses and Savings Account Rates

  Tags: Capital One Direct Banking, savings account

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Comments
8 Comments.
Comment #1 by Anonymous posted on
Anonymous
When a banks says that you will have to keep the money 4-8 weeks, they are creating gray area for cheating.

Why this is done is obvious, if you pull the money before you get the bonus, they win. They will delay the payment as close to 8 weeks as possible and invest our money that will generate bigger interest for them.

If you include time to ACH money IN and then out, they gain at least another week of free use of our money.

In either case, the bank is the winner in this offer. Count me out of it.

1
Comment #2 by Anonymous posted on
Anonymous
From the way I read the terms, you only have to have the 10K in there on 11/25.

That means you could take the entire amount out on 11/26.

It just says you need to keep the account open for 4-8 weeks after that date, not that you have to keep a minimum of 10K in the account for those weeks.

Would probably be a good idea to verify this before depositing any money though.

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Comment #3 by Anonymous posted on
Anonymous
A CSR just told me, the $10K must be deposited no later then 11/25/2009 and the money must be there while waiting for the bonus payout within 4-8 weeks.
The first poster of this blog is correct.

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Comment #4 by Anonymous posted on
Anonymous
Capital One and B of A are the worst banks to deal with. They will not pay the bonus since they always write vague terms and conditions and then they negate or change the conditions at will. If you read the terms spelled out, you will see the line that says: "We deserve all rights to either change or remove or modify the terms of this offer at any time" or something like that.

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Comment #5 by marc (anonymous) posted on
marc
with rates this low, so what if they "invest our money" for 8 weeks while you wait for the $50? If you can tell me where to earn $50 of risk-free interest on $10k (3% ann. not including the 1.6% they pay us) for 2 months, I'd like to know. not including reward checking, of course, which has hassles that this deal does not. seems worth it to me if you have money laying around you don't need for spending or have locked or will want to lock up in CDs.

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Comment #6 by Anonymous posted on
Anonymous
Confused: $10,000 for 2 months at 1.59%APR/1.60APY with $50 bonus is not 3%... 10k*1.6%+50=207.81int (assumes 1.6%stays constant);that's only 2.078% apy. For a quick 2-month hold in this account, though it could be 2.5 months after you move funds around, this deal is still a nice bonus.

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Comment #7 by JCE (anonymous) posted on
JCE
In order to annualize a return it needs to be calculated over a 1 year period (APY). Calculating the APY on a fixed one time bonus amount when the account will be open for less than 1 year gets a little tricky. Both marc and Anonymous are correct in their calculations but they each used different assumptions. What marc did was assume the account will be open for only 2 months, multiply the bonus earnings for the 2 month period by 6 to annualize it, which would be 3% of $10,000 for the year ($50 every 2 months = $300 per year = 3.0 APY). Of course you can't actually get $300 by leaving the account open for 1 year, the bounus is 3.0 APY but for only 2 months, add the 1.6 APY and the account earns an APY of 4.6 but for only 2 months, You can think of this as a 2 month CD with an APY of 4.6 (assuming of course you close the account after 2 months) after 2 months the APY would then decrease each month as the $50 bonus is spread over a longer period of time. So the deal as far as APY is concerned is at it's best if the account is closed right after the bonus is earned. Anonymous did the calculation based on leaving the account open for a full year.
It's a good deal if you don't mind going throught the hassle of opening a new account and then closing it after 2 months. Another thing to take into consideration is what APY the money you would use to fund this account is currently earning.

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Comment #8 by Free Poker Capital (anonymous) posted on
Free Poker Capital
Looks like $50 starting bonuses are vary popular, not only in poker world but also in banking :)

Regards

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