Review of Capital One’s New 360 Performance Savings Account

Last month Capital One launched a new online savings account, the 360 Performance Savings. If you want to open a new Capital One non-IRA savings account, your only options are this 360 Performance Savings Account and the Kids Savings Account. The 360 Savings Account and the 360 Money Market Account can no longer be opened. The 360 Performance Savings combines the best of these two old accounts: the rate matches the top rate of the 360 Money Market Account (1.90% APY as of 10/4/19) and like the 360 Savings Account, there is no minimum balance requirement to qualify for the top rate.

Existing customers with the 360 Savings Account and/or the 360 Money Market Account were not moved into the new 360 Performance Savings Account. Those accounts remain active earning the old rates. These old rates can be viewed by either logging into Capital One’s online banking or by viewing the online disclosures for these accounts. As of 10/4/19, the 360 Savings Account earns 1.00% APY on all balances. The 360 Money Market Account earns 1.90% APY for balances of at least $10k and 0.85% APY for balances under $10k.

If you’re an existing customer, it makes sense to open a 360 Performance Savings Account and move your Capital One liquid money into this account. For 360 Savings Account customers, you’ll earn almost twice the amount of interest. For 360 Money Market customers with a balance of under $10k, you’ll earn more than twice the amount of interest.

If you want to close your old 360 Savings and Money Market Accounts, you will need to call Capital One and request the closures. I was told by a CSR that they can transfer all the funds (including accrued interest) to the new account and close the old account while you’re on the phone.

Account Features

Below is a summary of the important features of the 360 Performance Savings Account. The ACH transfer features apply to all of the 360 liquid bank accounts.

• There is no minimum deposit required and no minimum balance required to obtain the top APY.
• No monthly maintenance fees
• 360 Performance Savings accounts do not have debit cards, ATM cards, or check-writing capabilities.
• Interest will be compounded and credited on a monthly basis.
• You will receive the accrued interest if you close your account before interest is credited (same for the 360 Savings and Money Market Accounts)
• Outgoing domestic wire transfer fee is $30.
• Up to three externally linked accounts can be established for ACH transfers
• ACH transfers between banks generally take two business days to process.
• There will be on a standard four business day hold when outside funds arrive into a 360 account.
• Limits for ACH transfers vary on a per account basis.

POD Beneficiary Designations Are Now Possible

After many years of customer complaints, Capital One changed its beneficiary policy for 360 deposit accounts in the summer of 2018, although not without some issues. My July 2019 blog post describes the initial changes (and problems), while the subsequent December 2018 blog post discusses the addition of an online platform for adding and managing beneficiaries.

Up to 10 beneficiaries per account can now designated, with Social Security numbers required for all beneficiaries. Once beneficiaries are named, the bank account will be referred to as a "Payable on Death" (POD) account.

Creating New Accounts - Common Bank Strategy

The 360 Performance Savings Account is the second new savings account created since Capital One completed the acquisition of ING Direct in February 2012. The first new one was the 360 Money Market Account which was introduced in March 2016. This was essentially a savings account with no check writing and no debit card. The only significant difference between the 360 Money Market and the 360 Savings account was the balance tiers and the APYs. As interest rates began to rise in 2017, the top tier of the 360 Money Market received most of the rate increases, rising from 1.00% to 2.00% APY. The 360 Savings Account didn’t fair as well. The rate only increased from 0.75% to 1.00% APY.

With the 360 Money Market Account, it made sense for those who maintained less than $10k to keep the 360 Savings Account. With the new 360 Performance Savings Account, I don’t see any advantage in keeping the 360 Savings Account or the 360 Money Market Account active. To earn the most interest, customers should open the new 360 Performance Savings Account and move their money.

It would be interesting to know how many customers with the 360 Savings Account kept large balances in this account instead of opening the 360 Money Market Account. I wouldn’t be surprised if many customers will keep their 360 Savings Account or 360 Money Market Account active rather than opening the 360 Performance Savings Account. Capital One will surely save on interest they pay out. It is a common deposit strategy at both brick-and-mortar banks and online banks to create new accounts with higher rates rather than raising the rates on existing accounts. Customers who don’t notice the new accounts will lose out.

Availability

Headquartered in McLean, Virginia, Capital One describes itself as “a diversified bank that offers a broad array of financial products and services to consumers, small businesses and commercial clients.” Any U.S. citizen or lawful permanent resident, 18 years or older, with a U.S. physical address or a military address (APO or FPO) and a valid Social Security number, can open an account at Capital One.

For new customers, opening a 360 Performance Savings Account can only be done online and must be funded from a checking account at another U.S. chartered bank (known as your Linked Account). According to the 360 Performance Savings Disclosure,

You must tell us to either electronically transfer money from your Linked Account or give us a personal check drawn on your Linked Account. Your 360 Performance Savings account won't be considered "opened" until you complete our verification procedures.

If you already have a Capital One liquid account, you can fund the 360 Performance Savings Account with your liquid account or with one of your existing Linked Accounts. Once opened, your existing Linked Account(s) will also be linked to your new 360 Performance Savings Account.

Bank Overview

Capital One has an overall health grade of "A+" at DepositAccounts.com, with a Texas Ratio of 2.29% (excellent), based on June 30, 2019 data. In the past year, Capital One has increased its total non-brokered deposits by $18.2 billion, an excellent annual growth rate of 8.09%. Please refer to our financial overview of Capital One (FDIC Certificate # 4297) for more details.

With assets in excess of $311 billion, Capital One is currently the seventh largest bank in the country. Besides having a large branch network (more than 480), Capital One also has a large internet banking division, previously known as Capital One 360.

Capital One acquired the internet bank, ING Direct, in 2012 and shortly afterward, ING Direct was transformed into Capital One 360. Operating as a subsidiary of Capital One Financial Corporation for about four years, Capital One 360 was absorbed in Capital One in 2017. Although Capital One 360 no longer exists as a separate entity, all of the Capital One 360 products are still available, but offered from the CapitalOne.com website. FYI – CapitalOne360.com automatically forwards visitors to CapitalOne.com.

How the 360 Performance Savings Account Compares

This new 360 Performance Savings Account has rates and features that are on par with the online savings accounts of several of the well-established online banks. These include American Express National Bank, Goldman Sachs Bank USA, Discover Bank and Ally Bank. All of these currently share the 1.90% APY on all balances.

Higher rates are available on 20 online savings accounts with similar low-balance requirements and features. Many of these are from newer and smaller online banks.

The above rates are accurate as of 10/4/2019.

To look for the best savings account rates, both nationwide and state specific, please refer to our Savings Account Rates Table.