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Capital One Direct Points New Customers to ING DIRECT


Capital One Direct has stopped taking new applications. The Capital One Direct Banking page now points visitors to ING DIRECT for new online-only checking, savings, or CD accounts. I had mentioned this last Saturday, but I thought it would be useful to highlight this news.

Existing Capital One Direct banking customers can continue to log into accounts at the Capital One Direct banking page. According to Capital One Direct's Q&A regarding changes to existing customers' Capital One Direct banking accounts, "nothing is changing at this time."

The Costco version of Capital One Direct is also not taking new applications. For existing customers, Capital One provided the following information:

If you are a current Capital One accountholder who opened your account through the Costco program, your account will continue to function as usual and you will receive the benefits of the Exclusive Costco Member rate until the end of 2012. Capital One will continue to service your account and provide support via phone and email.

It appears Capital One has decided that ING DIRECT will eventually be the only provider for the bank's direct banking. I had thought this would be the likely outcome in which ING DIRECT continues without any changes while Capital One Direct goes away. It didn't make sense for a bank to be running two competing internet banks.

ING DIRECT won't remain exactly the same. When Capital One acquired ING DIRECT from the ING Group, there was an agreement to allow a one-year transitional use of the name "ING DIRECT". Thus, we will see a new name for ING DIRECT before February 2013. Does anyone want to guess about the new name? Perhaps CAP Direct?

It has been almost one year ago when Capital One announced the ING DIRECT acquisition. The Europe Union required the ING Group to divest ING DIRECT USA due to the government aid ING had received during the financial crisis.

Capital One Branch Accounts Remain the Same

Customers can still open new accounts at Capital One branches. It appears Capital One will continue its branch accounts without any changes. These accounts are listed at CapitalOne.com. However, your zip code has to be in one of their market areas to see these accounts. Otherwise, you're directed to the Direct Banking page. Capital One Bank branches are located in Texas, Louisiana, Maryland, Washington DC, Virginia, Delaware, New Jersey, Connecticut and New York.

Branch Checking Promotion Continues

Capital One still has a promotion for new customers with a rate guarantee for the first 12 months for balances up to $100,000. This applies to Capital One's High Yield Free Checking Account. For most branches, the guaranteed rate is 0.75% which is lower than what it had been. However, for the Austin metro area, Capital One is guaranteeing 1.01% APY for the first 12 months on its High-Interest Free Checking. You have to enter your zip code to see the rate in your area. Louisiana branches still have the lowest rate (0.50%). These rates are accurate as of 6/8/2012.

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.

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  |     |   Comment #1
It cost money to maintain customer accounts. Capital One is not used to free services and no regular income coming out of the customer accounts, therefore, once fully integrated, Capital One will start monthly fees for all accounts, the free savings or checking accounts will cease to exist.
Ken (not banking guy)
  |     |   Comment #2
It seems that Capital One is now making it difficult for me to check the current rates on my Capital One Direct online savings and money market accounts. The rates are no longer shown on the Capital One Direct banking page.
  |     |   Comment #3
That's why Ken's comprehensive rate tables are a one stop shop.  Mediocre (falling) rates compel a lower public profile.  They may run but they can't hide from DA ;)
  |     |   Comment #4
I have had both a ING Direct account and a Capital One account. Both had no fees and a decent website. The only difference was the interest rate, sometimes ING would be higher sometimes Capital One would be higher.
  |     |   Comment #5
ING DIRECT's new name: CAPONE!

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