Capital One Online Savings Account Opened

I have been considering getting a new online savings account with a better rate for quite a while. The banks I am using right now (IGoBanking and FNBO Direct) are OK, but their rates are not as competitive as they used to be. After looking around and evaluating potential candidates such as Countrywide Bank, Provident Direct, and Capital One, I eventually decided to open an new savings account with Capital One. Though I never had any good impression with Capital One’s credit cards, the 3.75% APY of their Online Savings Account is pretty impressive (check out the latest interest rates). Besides, Capital One recently opened a branch office not far away from where I live. So that’s another plus. Countrywide Bank offers a slightly higher rate (3.80% APY), but that bank faces some uncertainties due to the pending Bank of America purchase. Since I already have my checking account with BoA and our mortgage loan with Countrywide, I don’t want to have another one with them.

Account Opening Process

Opening a Capital One Online Savings Account is quite easy, taking about 10 minutes with information that is required by any financial institution: personal information (no employment information required though), identity verification, and account funding method. For verifying the identity, Capital One asked some questions and

The questions are based on information from an external credit reporting agency. Rest assured that your answers will not affect your credit score in any way.

While, as the above statement says, the answers themselves will not affect my credit score, it isn’t clear whether Capital One conducts hard pull or soft pull. On their disclosure page, they does state that

For your protection, you agree that we may order a consumer credit report on you from a credit reporting agency. Upon your request, we will inform you of whether or not a credit report was requested and, if so, the name and address of each agency that provided this report.

It looks like I have to ask them to find out.

Fund the Account

At the end of the account opening process, I was asked how I want to make the initial funding of the account. I chose to link my BoA checking account to the new account. Before the external link is established, Capital One uses trial deposits to verify the account ownership, and it’s pretty fast. I opened the account last night and tonight the two trail deposits already appeared in my BoA account.

According to Capital One, I can link multiple external accounts to my Capital One account and transfer funds vis ACH between. However, each linked external account needs to be verified (use trial deposits) separately. And since this is a savings account, there’s a 6-withdraw per month limit.

Fund Availability

Like any ACH fund transfer, deposits made by external accounts via ACH take times to show up in Capital One account. It could take up to four days before the fund shows up in the account and another day or two before the fund become available. For example, if the fund transfer is made on Monday, then the money won’t be credited to the Capital One account until Thursday.

During the first 30 days following initial account funding, funds deposited into your account will be held for ten business days (available to you on the eleventh business day) after the day we receive and process the deposit. For accounts opened and funded older than 30 days, funds deposited into your account will be held for five business days (available to you on the sixth business day) after the day we receive and process the deposit. If you change the external account linked to this account, funds deposited into your account will be held for five business days (available to you on the sixth business day) after the day we receive and process the deposit.

Others

This morning I got an email from Capital One, saying that my new “Money Market Account or Certificate of Deposit Account” is now available. But what I opened is an Online Savings Account, not a MMA or CD. So I called them to make sure there’s no mistake or anything because their Money Market Account only pays 3.00% APY. What they told me was that the account I opened was indeed Online Savings Account, which is also a MMA. In addition to the name and rate difference, the MMA also offers ATM card and check-writing ability, but not for the OSA.

To earn the 3.75% APY, the minimum account balance for an OSA is $10,000. In the past, I usually stayed away from accounts that require high minimum balance to earn interest. But since the account balance at IGoBanking is well above this level, the high balance requirement isn’t really a big problem. Even if the balance is below the $10,000 mark, there’s no fees or anything and the money can still earn a 2.75% APY. And there’s no additional costs for lower balance, which is also a big plus.

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