This is part of our Rockstar Reviews series.
[Today’s first hand review is by fellow blogger, Jamie, from MediumSizedFamily. If you’re in the market for a new online bank, here’s one we think you’d like!]
Micromanage Your Money Without Even Thinking About It
Hey, I’m Jamie, a lazy budgeter who finally got a grip on her finances. My husband and I are working hard to get out of debt, and we’ve learned several tricks that are essential parts of our plan. One of the tools we rely on is a bank called Capital One 360.
This bank makes it easy to dole out your money into budget categories (or sinking funds) without extra effort. When I first learned about sinking funds, I was reading Debt Proof Living by Mary Hunt. (She called it a “freedom account,” but the idea is the same.) You open a new bank account and file money there for those expenses that occur less regularly than your normal bills.
Hunt encourages you to keep pen and paper records to break down the lump sum from that account into whatever categories you need. But I had already opened an account at (what was then known as) ING Direct. And I noticed that they’d let me open several different savings accounts. Why should I bother with keeping track of those categories manually when the bank was willing to do it for me? And for FREE!
Thus started my love for the bank that would later be known as Capital One 360.
What is Capital One 360?
Most people see the Capital One name and assume this is another credit card. And while it’s part of the same company, Capital One 360 is actually an online bank. Since they don’t have the overhead of brick and mortar banks, you’ll reap benefits like fee-free accounts (even without regular direct deposits) and typically better interest rates than you’d find at a local bank.
They also have simple online investment accounts with no minimum to open. Ease of use and low fees make this a good option for beginning investors. And the special offers for starting an account don’t hurt, either.
How It Works
When you’re ready to get started, you’ll have several options including free checking, savings, kids accounts, investing and more.
To open an account, you must be a US citizen (or permanent resident) with a valid social security number. You’ll give them basic information including your social security number. Then you’ll agree to terms like skipping paper statements. (If you’re opening an account online, chances are you’re ok with digital copies only.)
Same basic process as opening an account locally. Same FDIC insurance.
Next, you’ll link this account to your local bank account. This is how you’ll put the first money into your new account. The process usually takes 2-4 business days while you wait to verify everything. You can mail them a check, but that takes even longer.
Once you’re set up, one way to access your money is by transferring it to that local account. Be aware that this usually takes 2 business days. Transfers from one Capital One 360 account to another are instant.
While the bank is online, you can always access the money through a local ATM. Allpoint ATMs allow free withdrawals. Other ATMs will probably charge you a fee, but you won’t pay any extra fees to Capital One 360 when you withdraw money using their card.
Now For the Lazy Part…
The real reason I love Capital One 360 is that I can have several different accounts open, all linked to the same checking account.
You can open up to three total checking accounts, and up to 25 combined accounts between the 360 Savings, 360 Money Market and Business Savings Accounts.
For instance, we have an account for heat bills. We fill our propane tank a couple of times per year, but it’s always a doozy of a bill. Saving up all year long evens out this budget item and makes it feel more affordable.
After I set up the savings account that I nicknamed “Heat Bills” (I’m very creative, as you can see), I also set up an “automatic savings plan” to fund this account. Once a month, the money gets transferred from our regular checking to this account automatically. When I pay my bills, I make a mental note of it. Then I forget about it. It’s not my problem anymore.
But you can bet I’m one happy gal when the heat bill shows up and I have the money waiting there to cover it!
You can set up as many automatic savings plans as you want. You can choose to move cash weekly, biweekly or monthly. Everything’s customizable.
A fun feature is called “Set a Goal”. Choose an account you’d like to fund, and then give this goal a fancy name (if you’re more creative than me). Capital One 360 will then help you fine-tune this goal through two options: the amount of money you can afford to put in each month, or the end date.
So if you’re going on vacation in July and you know you’ll need to have $500 in that account by then, they’ll help you do the math to make sure you meet your goal.
You can set one goal for each of the accounts you have opened. Setting goals and using trackers makes me all giddy, so I get a big kick out of this page!
Capital One 360 also has the same features brick and mortar banks brag about:
- Setting alerts (get a text or email for whatever situations concern you)
- Depositing checks from anywhere with their smartphone app
- Direct deposit
- Online bill pay
All free and easy to use.
Why You Might Not Want to Use Capital One 360
- People used to visit their local branch every week might struggle with the idea of a virtual bank.
- You can find banks out there that offer better interest rates for savings accounts. (But they don’t offer you the same flexibility as Capital One 360.)
- If you don’t have an address in the USA, this bank won’t be an option for you.
- The wait time for a transfer to an account outside of Capital One 360 can be annoying. And by federal law, you can only make 6 transfers per month.
Worth a Try?
I’ve held these accounts for nine years, so clearly I think the answer is yes. You’ll love the ability to separate your money into accounts. No more worrying about having envelopes under your mattress or juggling a long sheet of numbers that never seem to balance right!
You can learn more, and sign up, here:
(They’re also giving $25 to new signups right now – woo!)
About the author: Jamie is a mother of 5 who is clawing her way out of credit card debt. She’ll do whatever it takes to be debt free, including instituting a #YearOfNo for her family.
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