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).