Ever since its launch in 2013, Capital One 360 has set the bar for the complete online banking experience. The Web-only bank is a subsidiary of Capital One Financial Corporation (NYSE: COF), which is one of the top 10 banks in the country based on deposits. In 2012, Capital One acquired ING Direct from ING Group (NYSE: ING) and rebranded it as Capital One 360. With a full range of banking services, including savings, checking, mortgages and investment accounts, Capital One 360 competes in the top tier of direct online banks, and is known for its low or nonexistent fees, user-friendly website and excellent customer service. The only complaint a person could have about the Capital One 360 offering was that it did not offer a money market account. That changed in March 2016 when Capital One 360 launched the 360 Money Market.
About the 360 Money Market
As with all of Capital One 360’s product offerings, its new money market account is simple and low cost. There are no monthly maintenance fees and no minimum balance or minimum deposit requirements. The account offers two tiers with the opportunity to earn a higher interest rate at the higher tier. For account balances of $10,000 or more, the average percentage yield (APY) was 1.85% as of October 2018. For accounts with less than $10,000, the APY was 0.85%. There are no debit card or check-writing privileges, but funds can be transferred electronically between other Capital One accounts and external accounts using an online dashboard or mobile app. The account also allows for remote deposit and direct deposit. Accounts are federally insured up to $250,000 per person, per account, and they are federally restricted as to the number of withdrawals that can be made within a statement period.
How the 360 Money Market Compares
If you are considering just the APY for comparison, there are several online money market accounts offering higher rates than 360 Money Market. The 360 Money Market first tier rate of 0.85%, while still well above the national average for money market accounts, puts it below several of its online competitors such as Ally Financial, Inc. (NYSE: ALLY) at 1.90%, SLM Corporation (NASDAQ: SLM) at 2.0% and Discover Financial Services, Inc. (NYSE: DFS) at 1.90%.
For depositors who feel that check-writing and debit card privileges are important features for their money market accounts, the 360 Money Market may disappoint. Many of its online competitors, including Ally, SLM and Discover, offer both. However, it is easy to make electronic transfers between other Capital One 360 accounts or an external account. Federal regulations limit money market account withdrawals to six per statement period.
Should You Choose the 360 Money Market?
With the launch of the 360 Money Market, Capital One 360 offers a complete package of online banking products and services. Depositors who can maintain minimum balances of $10,000 will find the APY is competitive. The advantage Capital One 360 has over its top online competitors is its strong, low-cost lineup of banking products such as free checking and savings, and low-cost investments. Capital One 360 is also known for its first-rate customer service, which is an important consideration for online depositors. Account holders have 24/7 access to customer service representatives. For customers who are looking for competitive rates in addition to a complete online banking experience, Capital One 360 rates as one of the best.