Capital One Direct Banking has long offered a few small perks for Costco members who open its internet bank accounts. These accounts have several nice features with no monthly fees, and they continue to have competitive rates. I thought it would be useful to highlight these perks for Costco members:
- Cash bonus when you open your first deposit account and fund with at least $5,000 within 30 days ($60 for Executive members and $20 for Gold Star and Business members)
- Higher interest rates (5 bps for InterestPlus Savings and 20 bps for Money Market)
The InterestPlus Online Savings Account continues to be a good deal. The Costco version pays 1.30% APY on all balances as of 1/31/2011. This account also has a 10% quarterly bonus on the interest earned with a monthly average balance of at least $10,000. So with the current interest rate, that can push the effective yield up to 1.43%.
Two downsides with the Costco version is that it requires a minimum initial deposit of $5,000, and the only way to qualify for the quarterly bonus is to maintain a $10K balance. The regular version requires only a $1 minimum initial deposit, and it allows monthly Capital One credit card usage to qualify for the quarterly bonus.
If you want limited check writing and ATM access, the money market account is an option. Checks are free. It's interesting to see that the Costco version has a rate 20 basis points higher than the regular version (The costco version yield is currently l.21% APY).
5-Day Hold Time on Deposits
Capital One Bank does provide some nice online banking features such as its ACH bank-to-bank transfer service. I reviewed these transfer features last year. However, it does have one downside that several readers have commented on. It has a standard 5 business day hold on deposits made into accounts, including ACH deposits. Here's what is stated in the account disclosure:
For accounts opened and funded older than 30 days, funds deposited into your account will be held for five business days (available to you on the sixth business day) after the day we receive and process the deposit.
The internet account disclosures 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 14.41% (excellent) based on September 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).