Capital One Direct Banking has made some improvements to its InterestPlus Online Savings Account. Previously, the account required that you maintain a $2,500 balance to qualify for the top rate. To qualify for the 10% quarterly interest bonus, a $15,000 balance was required. Both of these balance requirements have been reduced. Similar cuts were also made to the Costco version. I'm not sure when these changes were made. A reader just emailed me about them. When I last reviewed the InterestPlus account on May 30th, it still had the old balance requirements. Below is a summary of the new balance requirements for both versions.
Rates as of Oct 7, 2010
InterestPlus Online Savings
- $1 minimum initial deposit
- 0.10% APY for balances of $0 - $999.99
- 1.35% APY for balances of $1,000+
- 10% quarterly bonus on interest earned with a monthly average balance of at least $10,000 or use of a Capital One credit card at least once a month
- Source: Capital One Bank Rates and Terms
InterestPlus Online Savings (Costco Members)
- $5,000 minimum initial deposit
- 1.40% APY on all balances
- 10% quarterly bonus on interest earned with a monthly average balance of at least $10,000
- Source: Capital One Bank Rates and Terms (Costco)
The quarterly bonus can add roughly 0.14% to the listed yields which makes these savings accounts very competitive. However, I'm a little worried about Capital One maintaining these high rates. Their CD rates are currently very low. For example, their 4-year CD yield is only 1.25%, and the 1-year CD yield is only 0.50%.
Capital One has been offering the InterestPlus accounts for about one year, and since that time it has kept the rates very competitive. Other features that make this a top savings account include the lack of monthly fees and a solid ACH transfer service. I described details of the ACH service in my May Capital One Direct savings account review.
Capital One Direct also offers an Interest Online Checking account for those who live outside of Capital One's market areas. Please see my Capital One Checking Account review for more details.
The disclosures for both the savings and checking 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 an overall health score of 3 out of 5 with a Texas Ratio of 14.58% (excellent) based on 6/30/2010 data. Please refer to our financial overview of Capital One Bank for more details. It has been a FDIC member since 1994 (FDIC Certificate # 33954).