Considering Another Bank Account

Posted by Sun on March 31, 2008
Post viewed 577 times, 3 so far today

I was really impressed the other day when I found out that Provident Direct, a little known online bank, was offering 4.50% APY with their high-yield savings account, when everybody else was paying almost a full percentage point less. At that time, I was thinking of getting a new account if they won’t dramatically lower their rate after the Fed’s rate cut a week ago.

Well, I am still looking for an online bank that gives me more than my current bank, FNBO Direct (3.25% APY) and IGoBanking (3.28% APY), but my target isn’t Provident Direct any more after the bank dropped its interest rate by 0.75% last week following the Fed’s move. It’s Capital One Direct Banking’s Online Savings Account.

capital_one_direct_banking.png

I don’t have a good feeling about Capital One in general and don’t like their “What’s in your wallet?” credit card commercial a lot, but the 3.85% APY sure looks attractive. The only drawback of this account, as I can see now, is its high balance requirement. To earn 3.85% APY, the balance has to be $10,000 or more. However, if the daily balance falls below the requirement, there’s no extra fee and the balance can still earn a rate of 3.00% APY, according to their rate page. The minimum deposit to open an account is $1 and there’s no fee for this account, which means the account doesn’t have to be closed if the rate becomes unfavorable in the future.

I am seriously considering it.

Anybody else has experience with Capital One Direct Banking?

BTW, some latest rates besides those mentioned above:

It’s a full time job just to track how the rats change every day :)

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10 Comments
March 31, 2008

current apy 3.10%

Posted by steve
March 31, 2008

I have a One United account which earns 4%. I know other people have had problems with them in the past and they also only pay interest quarterly as well. I’ve been satisfied with their customer service and I hardly touch my savings account so the quarterly payment doesn’t really affect me.

Posted by moonimus
March 31, 2008

I have had a Capital One Account since December. I don’t qualify for the higher rate and I haven’t had any trouble with it.

It is fairly easy to set up accounts at other banks for money transfers if you want, but it seems to take a long time to transfer funds. It can sometimes take a little over a a week depending on when you do it. That seems long to me though I don’t have a lot of experience elsewhere.

Overall, I’m happy with the account except for the rotten interest rate now, which you note above and I can really only complain about the Fed for that.

Posted by BigBroodGander
March 31, 2008

That’s the only thing I hate about those new banks popping up. They tend to offer great rates.. people sign up and the rates drop two weeks later, it’s annoying!

Posted by Tom
March 31, 2008

If you’re looking for a better deal with the same $10,000 minimum balance, look at Countrywide Bank. They’re offering 4.05% currently fully FDIC insured up to $100,000 ($200,000 joint). There’s a possibility that they might go under but who cares? You’re still insured.

Posted by Christian Finance
March 31, 2008

Steve: I guess I used the wrong link for the savings account. I have updated the link which still shows a 3.85% APY.

Christian Finance: Thanks! I will check it out

Posted by Sun
March 31, 2008

The rates are going down, it’s a waste of time fighting for that extra $50 interest a year.

Posted by aa
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