Archives for December 2006

Capital One 360 is trying to stir things up again by rolling out a new high-yield 360 Checking account. Paradoxically, there will be no checks. Initially available only to “active” users of their 360 savings account ($25 signup promotion), it is not available to everyone. It offers the following features:

• 1.75% APYif your balances is under $50,000, 3.20% APY for $50-100k, 3.40% APY for $100k+
• No minimums or monthly fees
• Free ATM access at 32,000 locations nationwide
• Free BillPay and Debit Card
• No checkbooks, but you can send paper checks online.

My initial feature review:

Interest Rates – The rates are above average, but not the best. The fact that it has no minimum balance does make it unique. Otherwise, if you can satisfy some minimum balance or direct deposit requirements you can get a higher rate at various other banks including Everbank. It’s interesting to note that ING has added a tiered system now. I would remember to be careful not to exceed FDIC insurance limits.

No ATM rebates? – It turns out those “32,000 locations nationwide” are the AllPoint Network. These ATMs are often in random restaurants, so you have to go during business hours. I was hoping for something special, like the ATM fee rebates that Everbank and others provide.

Must Mail In Checks – This is my main annoyance with all online checking accounts. You can’t make deposits via ATMs, so you have to snail mail them in. Besides having to pay extra for postage, it only takes one lost check to cause a huge headache.

What Do You Mean, No Checks? – This is supposedly the most innovative thing about this account. They don’t give you checks, and you can’t even buy third-party checks with your account and routing number. You can request paper checks to be sent to specific people online, or you can send them an “electric” check with their account and routing number.

Conclusion
From the features list and what I’ve read about Capital One 360’s customer service history, I think this is a decent product. Much like their savings account, it does not have all the best features, but due to it’s relative simplicity it will work for a lot of people. If you can live with mailing in all your check deposits and live near some AllPoint ATMs, it could probably work as your main checking account. Otherwise, it may just be nice addition to your their savings account due to the lack of fees (if you use it).

Right now, I still think the best options are for people who live in a Citibank or Washington Mutual area to get a checking + 5% APY savings combo with them. You get checks, ATM deposits, high interest, and instant inter-account transfers to maximize your savings balances.