If you live in the market area of Capital One Bank, new customers can still get a good checking account deal. They have been offering this deal for awhile, and I’m still seeing it advertised. It has become a better deal as rates at other banks have fallen. Capital One is guaranteeing a promotional rate (1.00% APY for most areas) for balances up to $100,000 for the first 12 months. Details of this promotion are listed at the Capital One High Yield checking page. Note, it will only show if your zip code is in their market area.
This 1.00% APY promotion appears to be offered in most all of Capital One market areas which includes Washington DC, Delaware, Maryland, New Jersey, New York, Texas and Virginia. Some areas have lower rates (only 0.75% in Louisiana).
There have been reports that this 12-month rate lock doesn't guarantee the specific APY but only a rate that's 5x the national average. The disclosure doesn't make this 100% clear. However, the FAQ says “No matter what happens to the national average in that 12 month period, your APY will never go down.”
One thing that's a little sneaky is that they call this a free checking account with no monthly service fee. However, a minimum $5,000 combined balance is required to maintain the account. If this balance isn't maintained, your account may be converted or closed. In April 2012 Capital One angered several customers who had their checking accounts converted.
Even though it's not really a free checking account, it has some nice features like ATM fee refunds (up to $15 per month) and free checks.
Capital One Outside Their Market Area
If you live outside Capital One's market area, Capital One's banking webpage will direct you to Capital One 360 (The conversion of ING DIRECT into Capital One 360 was completed in February). So Capital One 360 is the only option for new customers who don’t live in Capital One’s market area. There’s no rate guarantee for Capital One 360 Checking, but it has remained very competitive for large balances. As of 3/25/2013, it pays 0.85% APY for balances of $100K+ and 0.80% APY for balances between $50K and under $100K. Also, there’s a $50 checking account bonus (click on the “open a checking account” link at the DA Capital One 360 page).
Capital One Bank Overview
Most of Capital One deposits at branches and at Capital One 360 are held under Capital One, N.A. (FDIC Cert. # 4297). Deposits at the old Capital One Direct were mostly held by Capital One’s other bank charter, Capital One Bank (USA), N.A. (FDIC Cert. # 33954). Capital One, N.A. has over $250 billion in assets. It has an overall health score at DepositAccounts.com of 5 stars (out of 5) with a Texas ratio of 6.32% (excellent) based on December 2012 data. Please refer to our financial overview of Capital One, N.A. for more details.