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Capital One Moving Customers Out of Free Checking Accounts

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Capital One Direct Banking

If you currently have a free checking account at Capital One, it may not last much longer. Capital One has been sending letters to customers informing them that their free checking accounts will be converted on 6/5/2012.

This Consumerist article describes the three types of checking accounts being offered. The Consumerist reader was angered by the fact that Capital One was changing his account to a Premier Rewards account unless he selected another one. The Premier Reward Checking has the largest monthly fee and requires the largest balance to avoid the fee. This doesn't appear to be the case for all customers. A DepositAccounts.com reader forwarded me the email she received, and it informed her that she was being moved to the Rewards Checking unless she chose something different.

This change doesn't appear to be affecting all checking account customers. I still have a Capital One checking account that I opened in Texas (It was when they were guaranteeing 5% for 1 year). I haven't seen any indication that this free checking account is being changed.

You can see the three types of branch checking accounts in the Capital One checking account page. You can only see the branch checking accounts if your zip code is where they have branches. The Premier Rewards Checking and the Rewards Checking have monthly service fees unless you qualify to have them waived. The High Yield Free Checking account has no monthly fees. However, to maintain this account you must have either a combined monthly balance of $5,000 or have a Capital One Bank home loan. This is the case for most Capital One market areas. However, for Austin Texas zip codes, this $5,000 minimum doesn't apply.

Update: A Capital One official provided me the following information on this change:

Capital One Bank is NOT putting all customers in the Premier Rewards checking account. Please know that we're recommending accounts that we believe are a good fit for each customer based on their banking history. Certainly, not all customers default to Premier Rewards. Regardless, it's the customer's choice and we want to make sure customers know their account options and have plenty of time to decide.

Customers are receiving notice two months before the account change goes into effect, and once it does, they also will have a two-month grace period to meet the minimum balance or monthly direct deposit requirement. We want customers to make sure they're in the account they want and are providing them with numerous communications -- multiple direct mailings, email reminders, and a website that outlines the options and provides online chat support to answer any questions.

New Account Promotions

Even with the minimum balance requirement, you might still want to consider a Capital One High Yield Checking account. Capital One still has a promotion for new customers in which they are guaranteeing a 1.00% APY for up to $100K for the first 12 months (as of 4/23/2012). This appears to be offered in most of Capital One market areas (Washington DC, Delaware, Maryland, New Jersey, New York, Texas and Virginia). Some areas are offering lower rates (only 0.75% in Louisiana).

If you don't live in Capital One's market area, the only checking account available is the Interest Online Checking account. This promotional rate is only 0.60% for balances up to $100K for the first 12 months.

Future of ING Direct?

I hope these new fees and minimum balance requirements aren't an indication of what we may see at ING Direct after its merger into Capital One completes. In February ING Direct reported to its customers about what to expect with the merger into Capital One. So far it looks like the future ING Direct will be very similar to what we see today.

  Tags: checking account, Capital One Direct Banking

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Comments
19 comments.
Comment #1 by Wil posted on
Wil
Regarding the High Yield Free Checking, accounts at Capital One Direct count towards the $5K combined minimum blaance.

5
Comment #4 by Anonymous posted on
Anonymous
I also asked if IRA account balances count towards the $5,000 monthly balance requirment for High Yield Free Checking and the rep said that it was.

4
Comment #9 by James (anonymous) posted on
James
Hi, what is my habit - I always chose to use such a low dollar amount since very few people have any savings at all and since $10,000 would be a little easier for a lot of people to digest. However, I did consider using a number like $1,000,000... There are some banks who requrie charges for each time checking your balance even by A.T.M card, but when my father needs to check his account he always make choice from girokonto vergleich or free checking account.

2
Comment #11 by Mr.Hengist (anonymous) posted on
Mr.Hengist
Since seeing this post I've been anticipating letters from Capital One regarding my checking accounts.  I got them last week and they informed me that my accounts were being switched to "VIP Interest Checking" with no mention of additional requirements like a minimum balance, etc.  What's curious is that I couldn't find a Capital One webpage which described the VIP Interest Checking account. 

3
Comment #13 by Anonymous posted on
Anonymous
I got a letter from Capital One stating that my VIP Interest Checking account was being terminated on 6/5/2012 and that I had to choose another type of account.  I went to a branch office last week and switched to the High Yield Free Checking Account and in the process increased the interest rate on my checking account from 0.05% to 0.25%.  A five times increase.  The rate for the VIP Interest Checking has been stuck at 0.05% for over five years.

1
Comment #14 by Anonymous posted on
Anonymous
We have several accounts at capital one and it appears that they are trying to push people out; I'm glad I can move my accounts back to the credit union.

1
Comment #15 by Anonymous posted on
Anonymous
I received a letter back in April that unless you phoned it would be changing to rewards checking and once you converted you could not change back.  Well, I phoned in April and said I didn't want to change account.  That I needed account to remain same free checking.  The rep said I could keep the existing free account as it has

been for years.  But, also told me if I ever converted it, I could not go back.   I was so happy as I cannot afford

any checking fees.  I make very little money now. 

 

Just opened a statement yesterday, that said effective June 5 - they would be changing to rewards checking.

I was so upset called the bank - spoke with a rep...said that all accounts were being converted.  I told her how I phoned in April to handle this...Didn't care kept telling me the same thing.  Asked to speak with a manager -Janet

would not give me her last name....Is that how they do Business now?????  We don't give out last names....Bascially I explained to her what happened and she also said I have a note here that you phoned in April.

 

She just kept saying that I was giving misinformation and that all accounts would be converting.   I also told her

that I can't afford to pay any fees.  I make very little money selling Avon.  She just kep repeating herself.

 

I was getting nowhere with her, I said if I phone my branch would they know who you are???  She said yes just tell them Janet in advocacy.  I said thank you, Have a great day!

I was so upset and crying when I got off the phone.  I just feel like they are heartless and really don't care about the customer at all.  Also not fair that I handled this in April and now not enough notice account will change.

 

 

 

 

 

 

2
Comment #16 by Landaux (anonymous) posted on
Landaux
Ridiculous! Ive been with Capital one for 7 years, there wasnt any problems, but now it seems like the old saying "Money TALKS BULL-**** WALKS!" Ill simply be doing my banking elsewhere. 

1
Comment #17 by Anonymous posted on
Anonymous
They are all money-grubbing scum who just don't get it.  They are rats on the wheel of cash, using their customers money to make money and they make us pay for letting them use our money.  If they would stop wasting money on

mail outs that i have quit opening, you know the ones (you are approved IF) then there would be free checking.

Man has done this. 

2
Comment #18 by Joshua McCartney (anonymous) posted on
Joshua McCartney
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1
Comment #19 by Anonymous posted on
Anonymous
I just heard from my bank, Premier America, which bought out Telesis, that they would be converting free checking accounts.. Basically they are requiring that you open up a savings account with, guess what! A minimum balance requirement. **** them. I canceled my Chase free checking account when they started requiring a minimum balance or direct deposit, and I'll lose these guys too, now that they're doing the same.  If I have to hide my cash in my freaking mattress I'll do it. And it's not because I don't have the money, it's the principle of the thing. I am NOT going along with this BS. 

1