Capital One: Direct Banking
High Yield Money Market Account™

Based In:   Houston, TX (Capital One Direct Banking)
Bank RTN:   051405515
Customer Service:   (877) 442-3764
Minimum Deposit to Open:   $1
Minimum Balance
to Avoid Fees:
Website:    Capital One

And to think: There are people who know Capital One only for their credit cards.

The newest entrant into the world of online-focused accounts is Capital One, with their new Direct Banking High-Yield Money Market Account. I have to admit, too, that this account actually has me a little excited. (Actually, Capital One has had another, separate online savings account for a while. That offer, though, never thrilled me all that much. As I recall, the rate wasn't particularly competitive. Their new Direct Banking High-Yield Money Market Account, though, has some features which seem to make it a decent contender.)

First, let's grab a little background info on Capital One. I suspect everyone's heard of them: They're a huge financial institution, with nationwide reach and a marketing arm that holds its own with the rest of the Banking Big Boys. They spent a whole lot of money on commercials with burly guys in viking outfits. And as of this review, they hold over $85 billion in total deposits. They service over 50 million customer accounts. Are they a big outfit?

Uhh ... yeah.

Capital One Direct Banking: Features & Facts

Let's take a look at what Capital One's Direct Banking Money Market Account has to offer:

  • No fees. (Well, maybe wire transfer fees, but most folks won't likely use these).

  • Minimum to Open Account? One dollar.
  • Check your bedroom dresser. You probably have $1 in your sock drawer. How 'bout you let that buck accomplish something good?

  • No minimum balance required.
  • Free checks and a free ATM card.
  • Easy account-to-account transfers.
  • Move/transfer money to and from your existing accounts online or over the phones. (NOTE: Withdrawals by online transfer and check are limited to a combined six per calendar month, three of which may be by check. ATM withdrawals are limited to $500 per day, with no monthly limit on how many times you use the card. Capital One does not charge a fee for ATM usage, but the ATM owner may.)

  • FDIC insured.
  • Your account is covered up to $100k per depositor.

  • Easily schedule automatic regular deposits.
  • Unlimited external accounts.
  • Link to as many external bank or brokerage accounts as you wish.

  • Account nicknames.
  • Yes, like ING Direct, you can give your account(s) a nickname. Heck — and just about anything's better than "ONLINE MMDA," isn't it?

  • Download data.
  • You can download transaction data in CSV format for spreadsheets, as well as Quicken and MS Money formats.

  • Online statements.
  • Generate online statements (HTML format) for easy recordkeeping.

Account Opening Process

I completed my application at 12:09am on a Friday morning. It was so easy, I honestly thought I had missed something (or a few somethings). Five or six screens to run through. Total Time to Complete: five minutes, eleven seconds.

Basic stuff you'll need to complete the Capital One application:

  • Checkbook (for routing and account numbers of your initial linked account)
  • Driver's license
  • SSN
  • Various personal info and home/mailing addresses

Remember that if you're opening a joint account, you'll need the same stuff for the joint account holder.

Once I completed my app, within roughly five minutes, my email inbox contained a note telling me CONGRATULATIONS! because my application had been successfully submitted. My account would be opened within two business days.

The following Monday, I received my "Your Application was Approved!" email. The email requested that I call Capital One for further instructions. This same day, the two trial deposits showed up in my credit union's linked account.

I called Capital One on Wednesday morning. Their rep "Rick" was extremely pleasant and helpful. Before the account could be opened, he said, I would need to answer a few security questions based on info in my credit report. I did so, and at that point he gave me final instructions for accessing the account online.

Account Opening Timeline

  • Day 1 (Late Thurs/Early Fri.): Completed application.
  • Day 2 (Sat.): No activity.
  • Day 3 (Sun.): No activity.
  • Day 4 (Mon.): Email notification of application approved; request to call Capital One. Trial deposits appeared in bank account.
  • Day 5 (Tues.): No activity.
  • Day 6 (Weds.): Called Capital One. Answered security questions. Created log-in, password, etc.. Logged into account for first time. Initial funding transfer underway (notified by email).
  • Day 7 (Thurs.): Initial funding withdrawn from external account.
  • Day 8 (Fri.): No activity.
  • Day 9 (Sat.): Rec'd my welcome packet (snail-mail). Must fill out and return Account Acceptance Form. Also included 4 deposit slips, a privacy statement, and the Money Market Account / Electronic Transfer Funds agreement (rules and regulations).
  • Day 10 (Sun.): No activity.
  • Day 11 (Mon.): My initial deposit appeared in my Capital One Direct Banking account.

Various Screenshots

Visually, here's what you'll see when you log into your Capital One Direct Banking Money Market account:

Summary Screen
Direct Banking History Screen
Self-Service Screen

And a few more miscellaneous screens:

Transfers Screen - Step 1 Transfers Screen - Step 2 Link External Accounts Screen

Timeline: Funds Transfers

It appears that Capital One Direct Banking will be at the slower end of the ACH transfer spectrum:

  • Incoming Transfer Time: Initiated Transfer from my local checking account to Capital One: Tuesday, Aug. 21 @ 3:15pm CST. Confirmation email arrived within 10 minutes. Funds debited from my checking account on Wednesday, Aug. 22. Funds appeared in my Capital One account on Friday, Aug. 24. Rec'd email notification of completed xfer: Monday, Aug.27 @ 1:37am CST. Total transfer time: 3-4 business days.
  • Outgoing Transfer Time: Initiated Transfer from Capital One to my local checking account: Monday, Sept. 4 @ 9:45am CST. Confirmation email arrived within 5 minutes. Funds appeared in my local checking account on Thursday, Sept. 7. Total transfer time: 3-4 business days.

If you're looking to save interest (and time), you'll be better off initiating your transfers on early Monday or Tuesday mornings whenever possible.

Statements and Such

Like most online accounts these days, waiting for your statements to arrive by snail-mail is a thing of the past. You can grab your statements instantly online, and Capital One's Direct Banking makes it a snap. Select the ACCOUNTS tab, then STATEMENTS, and pick the month you wish to see via the drop-down menu. Your statement will appear in seconds.

Man, I love the internet.

Capital One Direct Banking Notes & Caveats

A few more notes regarding Capital One's Direct Banking Money Market account:

  • Linking to Other Capital One accounts.
  • If you have other accounts with Capital One (investment, auto loan, credit card, etc.), you can link them with your Capital One Direct Banking Money Market. I have a Capital One credit card, and was able to link and view it in my Direct Banking dashboard in under one minute. Doing this required only basic information from the card itself. (For what it's worth, I'm able to start a payment to my Capital One card from the Direct Banking interface, too.)

  • Customer service.
  • I've never had a problem of any sort with Capital One, and this includes my few visits with their customer-service representatives. No concerns here whatsoever.


Now that Capital One is earnestly trying to muscle into the online-savings market created (predominantly) by ING Direct and Emigrant Direct, we'll have to see what they're willing to do to acquire market share. At this point, there's nothing outstanding about Capital One's offering ... but there's nothing bad, either.

They're somewhat similar to HSBC Advance in that they do offer checks and a debit card on the account. So, for some folks, these features might put Capital One on the Short List of banks to consider.

Additionally, I find myself appreciating Capital One's calm and clean interface. (I'd choose it over HSBC's duststorm of buttons in a second!) I guess I've grown to appreciate simplicity in some things, and online banking is one of them. Let's see where Capital One takes their Direct Banking Money Market account from here — I'm encouraged by what I've seen so far.

Michael • September, 2007

Update • Feb. 20, 2008:

I've recently gotten a couple of inquiries from readers who want to know why I'm reluctant to take advantage of the higher-paying OSAs offered by HSBC Advance and Capital One.

In two words: Transfer times.

ING Direct and Emigrant Direct are ultra-speedy at transfers in and out of their accounts; HSBC and Capital One aren't. I will gladly take a moderately smaller amount of interest in return for faster transfers. Article End

Ratings are on a scale of 1 to 5, with 5 being the top ranking.
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