Capital One customers, check your interest rate

[FireLane]

I just came across this post on Reddit's PersonalFinance forum:

https://www.reddit.com/r/personalfinance/comments/er5qj8/alert_for_people_with_capital_one_savings_accounts/

The short summary is that Capital One is pulling a bait-and-switch on their own customers. If you have a regular Capital One 360 savings account, you're not getting their best interest rate. To get the highest interest rate they offer, you have to open a different account type, a "Performance Savings" account.

I've had a cash savings account with Capital One since they were ING, and I just did this myself. Since I'm an existing customer, there were no hoops to jump through. It took less than five minutes to set up the new account, and transferring the money from my old savings account to the new Performance Savings account was a one-click process. And for that tiny amount of effort, I increased the interest rate I'm getting from 0.5% to 1.3%!

[evme]

thanks for the heads up. Like you, I also have a Capital One savings account from back when they bought ING. I'll have to check to see which one I have.

[LoanShark]

What's the rate? I'm getting 1.1% APY on their money market acct...looks like performance savings is 1.15%?

[chicagomeg]

It's not a bait and switch, they sent out a clear communication when they changed the rates & I opened a new account in the app via a few clicks.

That being said, the interest rate difference was meaningful for a few months. At this point, the market rates have tumbled, theirs have tumbled in response, and now they're basically the same interest rates again anyway.

[bballfreakunc]

I found this out a couple months ago too. However, I also found a promo code for new savings account customers that worked for me. So I made an easy $100+higher interest rates.

[bacchi]

I found this out a couple months ago too. However, I also found a promo code for new savings account customers that worked for me. So I made an easy $100+higher interest rates.

Wait. You were already a 360 customer but you were able to use a new customer promo for a "Performance Savings" account?

[phildonnia]

My last statement shows 1.40% for "Performance Savings". So I guess I opened the correct account.
But what's odd is that the website advertises 1.15%.  Perhaps that's the plan for future rates?

I suppose this might be "bait-and-switch" in the sense that they change the interest rate once you've opened the account.  But that's fairly common for any bank, and they do reserve the right to change the rate without notice.

[fuzzy math]

Thanks for the tip I switched!

[FireLane]

It's not a bait and switch, they sent out a clear communication when they changed the rates & I opened a new account in the app via a few clicks.

That being said, the interest rate difference was meaningful for a few months. At this point, the market rates have tumbled, theirs have tumbled in response, and now they're basically the same interest rates again anyway.

I don't remember getting an e-mail from them, but I might have missed it, especially if it was buried in legal boilerplate.

I consider it a bait-and-switch in the sense that the regular savings account and the performance savings account are identical in all respects except the interest rate. They could have just upgraded all their customers to the higher rate. There's no reason to offer two different types of account except that it allows them to boast about their higher interest rate without actually having to pay it to all their customers.

[Loretta]

I miss my old Orange accounts that predated Capital One's purchase of the company.  They were much more straightforward.  If anyone has a better alternative to Capital One to recommend I'm all ears. 

[SavinMaven]

I started with the orange product too and preferred it. Was thinking of trying Ally. Anyone with any experience with them?

[chicagomeg]

I had a horrifying experience with Ally several years ago while travelling abroad where they transferred my money from checking to savings instead of the reverse, triggered overdraft protection, froze both my accounts, and left me without any available cash for almost a week. I switched to CapOne in the aftermath.

https://www.bogleheads.org/forum/viewtopic.php?t=295026

This thread made me think nothing much has changed. Don't forget Ally is just GMAC bank w/better branding.

[okisok]

Thanks for the heads up! I came to CO years ago from ING and have just been letting my EF build up there. I got it done in less than 10 minutes. The fine print said the promo expired on 6.10.20, if anyone is eligible for that.

[lukebuz]

Don't let one bad experience turn you off of Ally.  I've had nothing but the best experience.  Coming from a bank that doing anything is a hassle (online), the ease of transfers and transaction histories, etc is a nice surprise to me.  I've had a CD and 4 savings accounts with them.  No checking.

[AMandM]

Thanks, I checked and switched. Highest hourly rate of pay I ever earned, especially if you count multiple years of interest!

[Greenback Reproduction Specialist]

I signed up for the performance savings account a few months ago... I wish interest rates in general would stay above 2%... this is ridiculous!

[phildonnia]

I found this out a couple months ago too. However, I also found a promo code for new savings account customers that worked for me. So I made an easy $100+higher interest rates.

Wait. You were already a 360 customer but you were able to use a new customer promo for a "Performance Savings" account?

As long as you're bringing in "new money", I believe this is allowed.  I'll let you know in August if I get my bonus.

[AMandM]

Now the APY is down to 1.00%.

[Loretta]

I just checked and I’m down to 1.00%.  Annoying. 

[FireLane]

Necroposting my own thread because Capital One is being sued by the New York attorney general over this:

https://gothamist.com/news/ag-james-says-capital-one-cheated-new-yorkers-out-of-millions-of-dollars

According to the lawsuit, the bank claimed that its 360 Savings account had “one of the nation’s best savings rates” and that “your money will earn much more than what it would in an average savings or money market account.” It cites Capital One materials telling consumers “What’s the catch? There is none.”

But, according to James' office, there was a catch: that while the Performance accounts followed national trends that saw interest rates rising, the original 360 Savings accounts stayed with locked-down low rates.

It said both accounts were low as the Fed cut interest rates nationally to near 0% near the start of the coronavirus pandemic in 2020 — with 360 Savings at .3% and the Performance accounts at .4%. But national interest rates eventually bounced back. The lawsuit describes the Performance accounts rising to 3.30% in January 2023 and to a high of 4.35% in January 2024 — but the original 360 Savings accounts staying frozen at .3%.

Capital One created a new tier of savings account, identical to their regular savings account except for the interest rate, just so existing customers who didn't realize they had to switch over would keep earning near-zero interest. I don't know if this rises to the standard of illegal, but it was definitely a dishonest business practice.

The CFPB was suing them for the same thing, until Trump gutted the agency. Now the state of New York is picking up the torch.