Capital One Money Market $500 Bonus

[GoCubsGo]

I've got a pile of cash sitting around for kids college.  Got an offer in the mail for $500 account credit for $50,000 deposited (1.85% rate). I don't really keep track of credit card/bank deals but this seems pretty good.  For people who track these types of things, is this worth the time of setting up an account?  Is this a pretty typical offer?. Any thoughts would be appreciated!

[ducky19]

So I guess the answer depends on what else you would be doing with that money? If it's just sitting in a standard savings account making next to nothing, I think it's obviously worth it. How long do you need to keep the money tied up with Capital One? Are there any fees?

If you can avoid fees and you have to keep the money in there for 90 days, you're effectively earning 5.85% on your money (APY). Can you do better somewhere else with zero risk? If it were me, I would most likely take the offer - just make sure you read all of the fine print... that's how they gitcha.

[ditheca]

You can get some tax advantages by putting that $50k into a 529 plan.

I tried a much less lucrative offer with Capital One this year, invest $10k for two months for a $200 bonus.

It took six months and several phone calls before they finally paid out the bonus.  $200 in six months is only 4% interest.  I should have put the money into the S&P 500 instead of wasting time with Capital One.

[JLee]

I've got a pile of cash sitting around for kids college.  Got an offer in the mail for $500 account credit for $50,000 deposited (1.85% rate). I don't really keep track of credit card/bank deals but this seems pretty good.  For people who track these types of things, is this worth the time of setting up an account?  Is this a pretty typical offer?. Any thoughts would be appreciated!

How long do you have to keep it there?

[GoCubsGo]

Thanks for the replies:

I need to keep it in there for 2-3 years.  I definitely should look at 529 plan, living in Illinois my state tax break could be significant (high state tax).  I hope the 529 plan has some decent money market option.

It would be nice to have some flexibility. No fees (360 Capital One 360 Money Market).  I will take a look at 2-3 year cd rates to see how they compare but the 1.85% plus $500 gives me the flexibility that a CD doesn't have and it doesn't sound like I'd have much rate risk as even if rates go up I can pull it and put in a CD.  The $500 is what caught my eye as we get offers like this all the time with lesser sign up bonuses

[Money Badger]

@gocubs,  Great job on saving for college!    +1Million others advice on 529 Plan and one that is Illinois based so you do get the state income benefit up to whatever the limit may be for IL.    Max out the annual tax benefit only each year (you can contribute every year of college even if you just pay it right back out to tuition as well typically).     

Then find the best CD rate you can for the rest... Marcus by Goldman Sachs and Ally Bank are pretty aggressive (Marcus is tempting for this case with maybe a 1 year and a 6 month CD to try to catch rising rates through 2019?)  Then drop money into the 529s above as CDs mature each year to rake in that tax benefit.   It's taxable income, but lowest risk for a sure expense coming soon.    Call it $1K taxable on the CDs per year and several $100s on the 529 tax free?

In my state, tax rate is ~5% of income and it's $4K per kid per year that gets a tax break for it.   So that's $400 right away for $8K each year on both kids.   

[Pizzabrewer]

I've done a smaller bonus with Cap One but they pay it out faster than almost any other bank.  YMMV but I'd say go for it.

Edited to add:  I did the $10k for $200 bonus also. The bonus was paid 10 days after the deposit.

[HPstache]

I jumped on the $200 bonus for depositing $15K deal, but I was looking to get my E-fund in a MM account anyway, so it seemed like a win-win.

[wmcros1]

If you have the $50,000 to invest this is a great bonus since you only have to deposit $50,000 in new money to receive the bonus. The money also doesn't have to stay in the account just have a cumulative deposit of $50,000. Easy money and the rate of return is better than you will get anywhere else since you can deposit and then move the money to something else.

[MM_MG]

I've got a pile of cash sitting around for kids college.  Got an offer in the mail for $500 account credit for $50,000 deposited (1.85% rate). I don't really keep track of credit card/bank deals but this seems pretty good.  For people who track these types of things, is this worth the time of setting up an account?  Is this a pretty typical offer?. Any thoughts would be appreciated!

Check out their checking account offer.  We deposited $10K into the account and they gave us $200.  So for $20K we made $400 and I think we get the same interest rate. If it took 15 minutes to set both up I'd be surprised. Not sure the offer is still open though.  Did the same thing at Bank of America recently, that took no more than 10 minutes and required me to do direct deposit for a couple months or so.   

FWIW: I do not normally track these things and am no way an expert on the subject.   One word of caution though, be sure to remember the name of the bank.  Slight moment of panic when I went to do our taxes and couldn't remember where I had stashed $20,000.   Haha!