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5% Checking Account Guaranteed for One Year Continues at Capital One in Central Texas


Update 10/13/07: The 1-year guarantee intro rate is now 4.00% APY.

Capital One is still offering its free high yield checking account for those in Austin and San Antonio, Texas. My first report on this checking account was in April. Those in Central Texas have probably seen ads for this account. One thing that's not pointed out in the ads is that the 5% APY is guaranteed for the first 12 months which is a very nice feature as interest rates fall. After the first 12 months, the rate returns to the standard rate (which is currently 3% APY).

Capital One use to list this deal at HighInterestFreeChecking.com, but they've recently removed this page. I called Capital One on Friday, and the banking rep said that it's still available. He wasn't sure how much longer it would last, but with the removal of the webpage, I doubt the 5% 1-year guarantee will last too much longer.

Below is a list of features for this high yield checking account:
  • 5% APY guaranteed for first 12 months, standard rate (currently 3% APY) afterwards
  • Only for those in Austin and San Antonio metro areas of Texas
  • $50 minimum to open
  • No minimum balance or monthly fees
  • 5% is good on balances up to $250K
  • Automatic reimbursements on ATM fees charged by other banks
  • First book of 150 checks are free
  • Free online bill pay
  • No hard credit pull, just a ChexSystem verification
  • For sign-up, visit branch or call Capital One at 1-888-855-2265
  • Branch visit is still required even if you sign-up by phone
  • Has free ACH transfer system but with restrictive dollar limits: $3K in/out per day and $6K in/out per month
  • Can push/pull without limits using external bank account

Capital One Bank has branches in Texas and Louisiana. Last December, Capital One completed the merger of New York-based North Fork Bank. So this special checking promotion may be in other cities in the future; however, with the latest Fed rate cut, it might not be 5%.

Capital One also provides online banking at its Direct Banking website where they offer a 5% APY money market account (as of 9/23/07). Costco members can get a 5.20% APY money market account and Costco Executive members can get a $50 sign-up bonus. For more info on these money market accounts please refer to my Costco/Capital One promotion post and my Capital One Money Market Accounts post.

Capital One is FDIC insured (Certificate # 4297).

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Mario (anonymous)   |     |   Comment #1
My wife and I openend our second 5% checking account at Capital One today. We've been very happy with the first account, and this one allows us to extend the 12-month interest guarantee. I have the feeling that a couple of months from now, this could be one of the best account rates out there.

We received a box of free checks again, and we were told by the CSR that the 5% promo will end Oct. 15.
Banking Guy
Banking Guy (anonymous)   |     |   Comment #2
That's a good idea about opening up a second account. With only $50 minimum to open and no fees, it seems like a great way to guarantee at least 5% for another year.
Anonymous   |     |   Comment #3
Can one open it, with say $50, and add more throughout the year at the same 5% rate; or will the "new money" get whatever the current rate is when deposited?
Mario (anonymous)   |     |   Comment #4
Commenter from Sept 29,

yes you can open it with $50 and add (or withdraw) at any time and receive 5% APY on your balance for a year. Think of it as a liquid 12-month CD with the benefits of a checking account, being able to add and withdraw at your choosing.

You should receive a notice during account opening that states this account earns 5% for the first 365 days from account opening.
Mario (anonymous)   |     |   Comment #5
I'm not sure I was clear in my reply, you can add and withdraw money from it and earn 5% APY for "a year from account opening".