Capital One 360 Savings Account Interest Rates

Capital One's main savings product is the Capital One 360 Savings Account, an online savings account that pays interest on your balance. The rate changes regularly based on Federal Reserve decisions and market conditions, so the exact percentage you earn today will not be the same six months from now.

As of early 2024, Capital One 360 Savings accounts pay rates in the range of 4.0% to 4.35% annual percentage yield (APY), depending on your balance and the current market. This rate is competitive with other online banks but lower than some high-yield savings accounts offered by smaller online-only institutions. The rate you receive may also depend on whether you have other Capital One products or accounts.

Interest compounds daily and deposits to your account monthly. That means the bank calculates what you owe you each day based on your balance that day, then adds all those daily amounts together and deposits the total on the first of the next month. The more money you keep in the account and the longer you keep it there, the more interest you earn.

Key Takeaways

  • Capital One 360 Savings rates change monthly or quarterly based on Federal Reserve policy, so you should check the current rate on Capital One's website before opening an account.
  • Interest compounds daily and deposits monthly, meaning you earn a small amount of interest on your interest each month.
  • There is no minimum balance requirement to open a Capital One 360 Savings account, but you must maintain a $0 balance to keep the account open.
  • You can withdraw money from the account at any time without penalty, though federal rules once limited savings withdrawals to six per month (that rule is no longer enforced, but some banks still apply limits).
  • Capital One does not charge monthly maintenance fees on the 360 Savings account, but you may pay fees if you overdraft a linked checking account.

How to Check the Current Rate

The rate Capital One pays changes, so the number you see today may not be what you earn next month. The most reliable way to see the current rate is to visit Capital One's website directly and navigate to the savings account product page. You can also call Capital One at 1-877-383-4802 to ask what rate they are currently paying.

When you compare rates across banks, pay attention to the APY, not just the interest rate. APY includes the effect of compounding, so it shows you the true annual return. A bank advertising a higher rate but compounding less frequently may actually pay you less than a competitor with a lower stated rate.

How Interest Deposits Work

Capital One deposits your interest earnings on the first business day of each month. If the first falls on a weekend or holiday, the deposit arrives on the next business day. The amount you receive depends on your average daily balance for that month and the rate in effect during that period.

For example, if you keep $10,000 in the account for a full month and the APY is 4.35%, you earn roughly $36.25 that month (the exact amount varies slightly because interest compounds daily). That $36.25 deposits to your account on the first of the next month and immediately starts earning interest itself.

Comparing Capital One 360 to Other Savings Accounts

Capital One 360 Savings is a solid choice if you already bank with Capital One or want a recognizable brand with a physical presence (Capital One has branches in many states). However, other online banks sometimes pay higher rates. Checking the current rates on sites like Bankrate or DepositAccounts can show you whether Capital One's rate is competitive on the day you plan to open an account.

The trade-off is usually between rate and convenience. A smaller online bank might pay 4.5% APY while Capital One pays 4.2%, but Capital One offers the option to visit a branch, deposit cash, or speak to someone in person. If you value that convenience, the slightly lower rate may be worth it. If you only move money electronically and never need to visit a branch, a higher-paying online bank might make more sense.

Fees and Account Limits

Capital One 360 Savings accounts have no monthly maintenance fee and no minimum balance requirement. You can open an account with $0 and keep it open as long as you maintain a $0 or higher balance. There is no fee for deposits or withdrawals.

Federal law once limited savings account withdrawals to six per month, but that rule is no longer enforced. Capital One does not currently restrict how many times you can withdraw from a savings account. However, if you link your savings account to a checking account and overdraft the checking account, you may face overdraft fees on the checking side.

How to Open a Capital One 360 Savings Account

You can open a Capital One 360 Savings account online through Capital One's website, by phone at 1-877-383-4802, or in person at a Capital One branch if one is near you. You will need to provide your Social Security number, date of birth, and address. The process usually takes 10 to 15 minutes online.

Once your account is open, you can fund it by transferring money from another bank account, depositing a check through mobile deposit, or mailing a check to Capital One. Transfers from another bank typically arrive within one to three business days. If you have a Capital One checking account, transfers between your own accounts are usually instant.

When Interest Rates Change

Capital One adjusts its savings rates in response to changes in the federal funds rate, which the Federal Reserve sets. When the Fed raises rates, Capital One typically raises its savings rate within days or weeks. When the Fed cuts rates, Capital One usually cuts its savings rate as well, though sometimes with a slight delay.

You do not have to do anything when the rate changes. Your account automatically earns the new rate on the first day it takes effect. If you want to know when a rate change is coming, you can watch Federal Reserve announcements or check financial news sites that cover interest rate decisions.

Frequently Asked Questions

Can I earn interest on money I transfer from another bank?

Yes. As soon as the transfer arrives in your Capital One 360 Savings account, it begins earning interest at the current rate. If you transfer money on the 15th of the month, you earn interest on that money for the rest of the month, and the interest deposits on the first of the next month.

What happens to my interest if I withdraw money mid-month?

You keep all the interest you have already earned. Interest compounds daily, so if you withdraw on the 20th of the month, you have earned interest for 19 days and keep that full amount. You simply stop earning interest on the withdrawn money starting the 21st.

Is my money safe in a Capital One savings account?

Yes. Capital One is a bank insured by the Federal Deposit Insurance Corporation (FDIC). Your savings account balance is protected up to $250,000 per account owner. If you have multiple accounts at Capital One (such as a checking account and a savings account), the $250,000 limit applies to the total across all deposit accounts in your name.

Do I pay taxes on the interest I earn?

Yes. Interest income is taxable as ordinary income. Capital One sends you a Form 1099-INT each January showing how much interest you earned the previous year. You report this amount on your tax return. The interest you earn is taxable even if you do not withdraw it from the account.

Can I move money between my Capital One savings and checking accounts?

Yes. If you have both a Capital One 360 Savings account and a Capital One 360 Checking account, you can transfer money between them instantly through the Capital One website or mobile app. There is no fee for these transfers, and they show up immediately in both accounts.