Update 5/22/2012: The promotional rate has fallen. Also, the number of monthly transactions required has gone down. Now only 10 transactions per month are required to qualify for the promotional rate. Please refer to the Capital One promotional webpage for the latest details.
Capital One Bank has responded quickly after new rules took effect last week which allows banks to pay interest on business checking accounts. Capital One has started to advertise a new promotion called the Clear Interest Business Checking. It guarantees 1.10% APY for 1 year on balances between $10K and $100K. The rate isn't great, but the 1-year guarantee is nice.
This promotion is only available in states where Capital One has branches. The rate also varies by state, but currently, the only state that doesn't offer 1.10% APY is Louisiana which only pays 0.50%. The states where Capital One has branches includes CT, NJ, NY, DE, LA, MD, VA and TX.
Another downside to this offer is that the promotional APY requires 25 or more transactions per month. Without these number of transactions, the APY for that month will fall to only 0.05%. The checking account also has several downsides in potential fees. Here's an excerpt from the small print:
No monthly maintenance fee with a minimum average daily balance of $10,000.01 or more; otherwise, an $8 monthly maintenance fee applies. For deposit totals over $10,000 per month, a $1 fee per $1,000 cash deposit applies. Transactions over 300 per month are each charged a $0.17 fee.
Capital One Personal Checking Deal in Austin
This business checking promotion is similar to the personal checking promotion that Capital One is offering in the Austin Texas metro area. However, the Austin promotion is a much better deal. I have more details in my Capital One Austin Checking deal post. Unfortunately, it's not available outside of the Austin metro area.
Capital One's Acquisition of ING Direct
The big news related to Capital One Banking was the June announcement of its pending acquisition of ING Direct.
Capital One Bank Overview
Capital One Bank has two FDIC charters. Capital One Bank branches are under Capital One, N.A. (FDIC Certificate # 4297). Direct Banking is under Capital One Bank (USA), N.A. (FDIC Certificate # 33954).
Capital One, N.A. is a large bank with $126.9 billion in assets. It has an overall health score at DepositAccounts.com of 4 stars (out of 5) with a Texas Ratio of 10.19% (above average) based on March 2011 data. Please refer to our financial overview of Capital One, N.A. for more details.