Capital One 360 certificates of deposit offer a safe way to grow your savings with some competitive interest rates that range from 3.60% to 4.25% annual percentage yield (APY), depending on the CD term you choose. All of its CD terms — six months to five years — have a good feature for novel savers: no minimum balance requirements.
Annual percentage yields (APYs) and account details are accurate as of Sept. 5, 2024.
Overview of Capital One 360 CDs
Capital One CDs have no minimum balance requirements and earn fixed, guaranteed rates. You can choose how you want the interest distributed to you: monthly, annually or at the end of the term.
The terms range from six months to five years, and there is an early withdrawal penalty if you need your money before the end of the term. Also, note that partial withdrawals are not allowed.
| OVERVIEW | |
|---|---|
Minimum deposit | $0 |
Term lengths | 6, 9, 10, 12, 18, 24, 30, 36, 48 and 60 months |
Compounding schedule | Monthly |
Early withdrawal penalty |
|
Grace period for penalty-free withdrawals after maturity | 10 days |
Pros and cons of Capital One CDs
Pros
- Competitive interest rates. The main factor in selecting a CD, Capital One offers robust rates among all of its terms.
- No minimum balance requirements. A useful feature for new savers looking to build their savings.
- The backing of a large national bank. You can feel comfortable putting your money with an established bank that offers a slew of digital tools.
Cons
- Terms only up to five years. If you’re looking for the best 10-year CDs, you’ll have to consider other options.
- May find higher rates on specific terms at other banks. While Capital One offers competitive rates, the best CDs on the market are usually found elsewhere.
- Early withdrawal penalties apply. Should you need access to your cash before your term expires, you’ll have to deal with an early withdrawal penalty.
How much can you earn with a Capital One 360 CD
The details of a CD, including its yield, minimum deposit requirements, interest payment schedule, and fees, depend on the issuer and whether you purchase it new. The available yields are listed in the table below.
| CD TERM | APY |
|---|---|
6 Months | 4.25% |
9 Months | 4.25% |
12 Months | 4.25% |
18 Months | 4.00% |
24 Months | 3.80% |
30 Months | 3.80% |
36 Months | 3.70% |
48 Months | 3.65% |
60 Months | 3.60% |
With our CD calculator below, you can run the numbers to see how much you’d earn.
How Capital One 360 CDs compare
Here’s how Capital One 360’s yields stand up to the national average rates as of August 19, 2024, according to the Federal Deposit Insurance Corp. Keep in mind that the national averages tend to be significantly lower than top-of-the-market yields because many institutions make the strategic choice not to be competitive in this field.
The FDIC uses an average of the $10,000 and $100,000 product tiers for deposits in its calculation of monthly national CD rates. The data used is from S&P Capital IQ.
If Capital One 360’s rates are similar or under the national average, you can probably find higher yields elsewhere. Here are our picks for the best CD rates.
| CD TERM | CAPITAL ONE 360 CD RATES (APY) | National Rates (APY) |
|---|---|---|
6 month | 4.25% | 1.82% |
12 month | 4.25% | 1.85% |
24 month | 3.80% | 1.58% |
36 month | 3.70% | 1.44% |
48 month | 3.65% | 1.35% |
60 month | 3.60% | 1.42% |
What to consider before opening a Capital One CD account
When choosing any CD, you’ll first want to consider the term.
You’ll want to be reasonably sure that you will not need the fund before the term of the CD is up. Otherwise, you will have to pay a penalty for breaking the CD early. With Capital One the penalty is either three or six months of interest, depending on the term of the CD.
Quick tip. If you’re worried you might need your money before the term expires, consider opting for a no-penalty CD. You’ll be able to access your cash at any time.
Next, shop around for the highest interest rate for the term you have selected. Choose a bank you feel comfortable with. Capital One 360 is the online division of Capital One, the ninth-largest bank in the country. But you may find higher rates for your specific term at other banks.
You’ll also want to be aware of any minimum deposit requirements. Capital One does not have a minimum balance requirement, but some banks do.
How to open a Capital One 360 CD account
Once you have decided which CD you’d like to open, click on “Open an Account.” The website will then guide you through the following steps.
- Login or create your Capital One account. New customers will need to fill in some information by hand, including name and address. Current Capital One customers can login and have part of the CD application automatically filled in.
- Choose your term. Capital One CD terms range from six to 60 months. As you look, consider which term suits your overall financial plan. Early withdrawal penalties will cost three- to six-months worth of interest.
- Decide on interest payouts. When would you like to receive the interest that your deposit earns? You could choose to get it monthly, annually or upon the CD’s maturity.
- Link another account. Because Capital One 360 is the online arm of the bank, you can’t go to a branch and make a cash deposit to fund your CD. Rather, you must do an electronic transfer by linking another account. This other account can either be in-house (a Capital One checking account, for example) or external (at another institution).
- Fund the account. To finish opening the CD, put money in it. You can only add money to a Capital One 360 CD one time. (Later, if you have more cash you’d like to invest, you can open another CD). There’s no minimum balance, so you could open one with whatever funds you have.
Documents you’ll need
In all likelihood, you won’t need to submit documents, but, if you’re not already a Capital One customer, you will need to provide some information to open an account, including your name, date of birth, email, residential address and government identification number, such as your Social Security number (SSN) or Taxpayer Identification Number (TIN).
Alternatives to Capital One CDs
If locking your money up in a CD isn’t appealing, you have several other options.
High-yield savings
The best high-yield savings accounts currently have interest rates that are competitive with CDs. They offer high APYs while still allowing you to make withdrawals and additional deposits as needed. The Capital One 360 Performance Savings account earns 4.25% APY. The downside of a savings account is that the interest rate can change at any time, while a CD has a fixed rate for the entire term.
Money market fund
A money market fund is a short-term mutual fund that doesn’t require you to lock away your cash and could provide some tax benefits. Before you sign up, though, understand that your interest rate isn’t guaranteed and can change at any time. Capital One 360 doesn’t have a money market account.
Bonds
Bonds are low-risk investments, with federal government bonds being seen as the most secure. Like with CDs, you lock your money away for a set amount of time and earn interest on your deposit.
Government bonds include Treasury inflation-protected securities (TIPS), I Bonds, EE Bonds, treasury bills (T-Bills), treasury notes and municipal bonds. Companies big and small also offer corporate bonds.
Note that you can sell your bond before the term is up if you need your funds sooner. However, the price you will get for your bond will depend on the current market interest rates at that time. If rates have gone up, you are unlikely to recover your entire principal amount.
About Capital One Bank
Perhaps best known for its credit card ads, Capital One is a full-service, national bank with over $450 billion in total assets, making it the ninth-largest bank in the nation. It was founded in 1994 and offers a robust variety of financial products, from checking and savings accounts to credit cards and auto loans.
Frequently asked questions (FAQs)
Yes, CDs from Capital One are insured by the Federal Deposit Insurance Corporation (FDIC). This means you are covered against bank failure up to $250,000 per person, per insured financial institution, for each account ownership category. The FDIC guarantees protection for bank deposits and the credit union deposits are covered by the National Credit Union Share Insurance Fund.
“Funds in excess of those limits are not guaranteed to be safe,” said Andrew Griffith, CPA and associate professor of accounting at Iona University.
While many CDs require a minimum of $500 or more for their CDs, Capital One CDs don’t have a required minimum deposit. You can open one with whatever balance works for you.
There are no fees or costs associated with opening a Capital One CD and it can be done online in around five minutes. As an industry norm, there is typically no cost to open a CD. Financial institutions use your CD deposits to fund other aspects of their business. A CD is essentially a loan to a company and your cut of the profits is paid to you in the form of APY. Charging you fees to open a CD would be counterproductive for the provider in most scenarios.
Like most CDs, Capital One CDs automatically renew unless you withdraw your cash. The renewed CD will be for the same time period and the interest rate on it will be whatever rate was offered by Capital One on the date it renewed.
Yes, Capital One CDs have an early withdrawal penalty that’ll cost you three months of interest if the CD is one-year long or shorter; six months of interest if the CD has a term greater than 12 months.
Capital One 360 is the online division of Capital One. Online banks typically pay out a higher interest rate on deposits in exchange for a lack of brick-and-mortar branches.
The grace period for a Capital One CD is 10 days after opening. You can close the account within this time period without a penalty.
