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Capital One Direct's New Interest Online Checking

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Capital One Direct Banking

Capital One Direct is now offering the Interest Online Checking Account. However, it doesn't appear to be available for everyone. When you first visit the Interest Online Checking page, you have to enter your zip code, and those in areas with Capital One branches such as Texas and New York are directed to the online savings account and the branch checking. I suppose Capital One doesn't want this online checking account to hurt business at its branches.

For those who have access to this checking account, there are several nice features. These include:

  • 1.10% APY on all balances as of 8/25/2010
  • No monthly fees or minimum balance
  • Paper checks (first order of checks is free per disclosure)
  • Reimburses you up to $10 each statement cycle of ATM fees charged by other banks

This checking account would make a nice companion account if you have Capital One's InterestPlus Online Savings Account which currently pays 1.35% APY (1.40% for Costco members). The savings account can also pay bonus interest which can boost the yield to over 1.50%. Capital One Direct has made a few improvements to its bank-to-bank ACH transfers. So with internet checking, high interest rates and convenient bank-to-bank transfers, Capital One Direct is a serious internet bank competitor.

For more details about Capital One Direct's savings and money market accounts and its bank-to-bank transfer service, please refer to my Capital One savings account review.

The disclosures for both the checking and savings accounts state that the accounts are "held at Capital One Bank (USA), N.A." This is one of the two FDIC chartered banks under Capital One. Capital One Bank (USA), N.A. has been a FDIC member since 1994 (FDIC Certificate # 33954).

Other High-Interest Checking Accounts


  Tags: Capital One Direct Banking, checking account

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Comments
6 Comments.
Comment #1 by George in Dallas (anonymous) posted on
George in Dallas
I have left Capital One after they failed to honor the $200 coupon to switch to their checking using direct deposit. I have a pretty high net worth and hate people that complain but I do not honor the integrity of Capital One.

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Comment #2 by Anonymous posted on
Anonymous
This checking account only offers electronic statements.  So don't expect your canceled checks being returned to you.

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Comment #3 by anonymous77 (anonymous) posted on
anonymous77
Re: #1 ("George in Dallas"), my experience, too, has been that Capital One goes out of its way to impose a strict 'direct deposit' requirement, with no alternatives for persons who have no source of direct deposit -- in particular,  self-employed persons.  I've closed my account with that Bank as well.

Capital One could easily offer alternatives (e.g., an automatic recurring incoming ACH transfer for a specified minimum period of time, perhaps with a minimum dollar amount) but chooses not to do so.

Although Capital One has been recommended here as a good choice for a 'hub' bank, a better choice with better customer service is USAA.

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Comment #4 by Anonymous posted on
Anonymous
Does it have a HARD credit pull during account opening?

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Comment #5 by Anonymous posted on
Anonymous
I am happy with the account and plan on keeping it.  However, I want to share a few interesting pieces so no want is caught by surprise.

- If you initiate a ACH transfer using CapOne to get money from an outside account, it takes about 2-3 days to receive and then CapOne puts a 3 business day hold on the money.  If you initiate the ACH transfer from your other account, you will save those 3 days.

- If you have received a check and do not have a CapOne ATM nearby, your only option is to deposit a check into another one of your checking accounts and then ACH transfer it to CapOne.  If you don't do that, you have to mail the check to CapOne.

- If you want to transfer money directly from your CapOne account to another CapOne customer, this does not work.  Use Paypal or expect to deal with sending a check and having them mail it back to CapOne.

I wish I would have know these key facts before I signed up.

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Comment #6 by Jim (anonymous) posted on
Jim
Does anyone know if you can deposit checks into this account by mail?  The website seems to say that you can only deposit checks payable to Capital One.  Is that correct?  If so, this account is not very useful.

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