Capital One Bank Review: Best for Fee-Conscious and Online Customers

Capital One Bank Review: Best for Fee-Conscious and Online Customers

Editor's Rating

Capital One Bank is a strong competitor in the online banking space, thanks to its online Capital One 360 division. With Capital One 360, the bank offers low fees and minimums and higher-than-average APYs. However, it may struggle to appeal to those looking for a more robust, in-branch banking experience.

Good for

  • Low fees
  • Low minimums
  • Higher-than-average APYs

Bad for

  • Limited branch locations
  • Not the absolute top APYs
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Editor's Rating

Capital One Bank is a strong competitor in the online banking space, thanks to its online Capital One 360 division. With Capital One 360, the bank offers low fees and minimums and higher-than-average APYs. However, it may struggle to appeal to those looking for a more robust, in-branch banking experience.

Good for

  • Low fees
  • Low minimums
  • Higher-than-average APYs

Bad for

  • Limited branch locations
  • Not the absolute top APYs
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Because Capital One 360 checking and savings accounts operate as an online division of the more traditional Capital One Bank, customers generally must conduct all transactions online. However, limited services are available in Capital One Cafes, where customers can get help opening accounts or basic account information.

One drawback is a lack of variety when it comes to Capital One checking accounts, although there is a checking account for teens, called the MONEY account, offered alongside the standard checking account, 360 Checking. Still, if you’re looking for a low-fee, low-minimum, high-yield option and prefer to bank electronically, Capital One 360 may be worth considering.

Review: Should you open a Capital One bank account?

Capital One’s primary appeal is to online banking customers. Although there are Capital One Cafes where you can get branch assistance, the bank’s 360 products are modeled after online-only banks that offer no-fee accounts and pay higher yields than traditional banks such as Chase and Bank of America.

Capital One 360 checking and savings accounts pay higher than average yields, but they don’t reach the lofty heights of many online banks. For example, the Capital One 360 Performance Savings account offers a 0.40% APY, which is about 8 times the national average savings APY of 0.05%. However, that yield is still below those of online competitors such as Ally Bank, which offers a 0.50% APY on its online savings account.

Still, this collection of no-fee checking, savings and CD accounts that pay much more than traditional banks may merit a look. For example, as an incentive to sign up, Capital One promoted a $100 bonus to customers who signed up for 360 Checking by Jan. 26, 2021, and spent at least $300 on their debit card within 90 days of opening the account.

Capital One checking accounts

Account Name
Details
360 Checking
  • APY: 0.10%
  • Minimum to open: $0
  • Monthly fee: $0
  • Monthly fee waiver: N/A
MONEY
  • APY: 0.10%
  • Minimum to open: $0
  • Monthly fee: $0
  • Monthly fee waiver: N/A

No-fee and no-minimum checking accounts make Capital One a great choice for fee-conscious customers with smaller bank balances. Many banks offer ways to avoid their monthly fees by keeping larger balances or making qualifying transactions, such as debit card purchases — Capital One’s free accounts don’t require jumping through such hoops. Although the rates are modest, all of Capital One’s free checking accounts do pay interest, something not all banks can offer.

One of the definite perks of the Capital One Bank structure is that it straddles the line between online and traditional banking. Although customers enjoy the no-fee, no-minimum, interest-bearing accounts that are the hallmark of online banks, those in select areas still have the ability to visit a Capital One Cafe. This can be handy for certain transactions, including depositing cash or checks at an in-Cafe ATM. However, most customers will likely facilitate the remote capabilities of Capital One more regularly, as mobile deposit is available via the app and fee-free transactions are offered at over 40,000 Allpoint and Capital One ATMs.

Capital One savings accounts

Account Name
Details
360 Performance Savings
  • APY: 0.40%
  • Minimum balance for APY: $0
  • Monthly fee: $0
  • Monthly fee waiver: N/A
Kids Savings Account
  • APY: 0.30%
  • Minimum balance for APY: $0
  • Monthly fee: $0
  • Monthly fee waiver: N/A
360 IRA Savings Traditional
  • APY: 0.40%
  • Minimum balance for APY: $0
  • Monthly fee: $0
  • Monthly fee waiver: N/A
360 IRA Savings Roth
  • APY: 0.40%
  • Minimum balance for APY: $0
  • Monthly fee: $0
  • Monthly fee waiver: N/A

Capital One’s 360 Performance Savings account checks all of the main boxes when it comes to an online savings account: This includes no fees, no minimums and an above-average yield, although it can’t compete with many online banks that offer even higher APYs. Both Traditional and Roth IRA versions of the account are also available.

The Kids Savings account is an option for children under the age of 18. When an account holder reaches age 18, this savings account for kids automatically converts into a 360 Performance Savings account. The no-fee, interest-bearing account can be a good way to teach kids how to save, as it includes an automatic savings plan and allows users to set up specific savings goals.

How does Capital One compare to other banks?

Capital One exists in the middle ground between traditional and online banks. While it offers lower fees and higher yields than most traditional banks, it doesn’t offer the yields of many other online banks. However, it does offer limited branch access — something online-only banks do not.

Capital One vs. Chase Bank

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Although Capital One offers some branch access, it’s no competition in this area when compared with Chase Bank. Chase offers about 4,700 branches across the U.S. Chase also offers a deep and varied product line, including multiple checking accounts, a variety of home loan products and its preeminent line of rewards credit cards. Chase Bank also offers some great sign-up bonuses, including $200 for signing up for Chase Total Checking and setting up direct deposit.

Capital One takes the crown from Chase Bank when it comes to fees and APYs. All of Capital One’s standard checking and savings accounts have no fees, no minimum balances and APYs that typically dominate Chase’s offerings. For example, the Capital One 360 Performance Savings offers a 0.40% APY, while Chase Savings pays just 0.01%.

Capital One vs. Ally Bank

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Ally Bank is one of the most prominent online banks, and as such it shares the same no-fee, no-minimum basic account structure as Capital One. However, Ally does a better job at providing yield to investors. For example, the basic savings account APY at Ally Bank is 0.50% APY versus Capital One's 0.40% APY. Similarly, Ally Bank’s checking account pays a 0.50% APY on balances of at least $15,000, while 0.10% APY is paid on all balances at Capital One (though Ally also pays lower amounts at this same rate).

Capital One has the edge over Ally if you’re ever in need of branch assistance. Although Ally does offer 24/7 customer service over the phone, it doesn’t have any physical locations. If you need a real person to resolve your issues, or if you just prefer having someone to speak with face-to-face, you have the option of using a Capital One branch. The catch here, however, is that Capital One branches are primarily limited to Louisiana, Maryland, New York, New Jersey, Texas, Virginia and the District of Columbia.

Capital One vs. TD Bank

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TD Bank has more than 1,200 branches located in the Eastern U.S. Its banking accounts are also more traditional than those of Capital One, in that they mostly come with monthly fees that can only be avoided through qualifying activities. For example, the TD Convenience Checking account — its most popular, according to the bank — charges a whopping $15 monthly fee, although that can be avoided with a modest $100 daily balance. The TD Beyond Savings account requires a very high $20,000 minimum to avoid its $15 monthly fee. Beyond this, the typical litany of big bank fees apply, such as a $35 overdraft charge, a $3 fee to use non-TD ATMs and a $15 fee for incoming wires.

Capital One clearly has the edge on TD Bank when it comes to fees and account minimums. TD Bank’s strength relative to Capital One comes in its customer service. Between extensive branch locations — albeit exclusively along the Eastern seaboard — and 24/7 customer service, TD Bank customers can easily access help when they need it.

John Csiszar served for over 18 years in the financial services industry, earning his Registered Investment Adviser and Certified Financial Planner designations along the way. He has 10 years of experience writing for a wide variety of financial publications about investing and the markets.

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

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