What makes an account the best savings account for your money? Is it the highest interest rate? The lowest fees? The most convenient? All of the above?!
Each one of us will have our own set of important criteria which we judge our banks by. To me a savings account is just a place to store my emergency fund and cash for any short-term savings goals I may have. So I don’t get too worked up over looking at it as an “investment” and sweating each percentage point of interest that could be being earned.
You’ll hear of a lot of people who do. They’ll constantly be moving their money around between banks chasing the highest interest rate of the moment.
The differences between interest rates is so minimal that it doesn’t make a big difference in this “zero interest” environment anyway. Say you have $10,000 sitting in a savings account earning 0.5%. Then one day you see an ad online for XYZ bank that will pay you a fat 1% on your savings! Double the rate! You better sign up as fast as you can, right? Well, not so fast… that extra .5% you’ll earn at the new bank works out to about $4.20 per month on your $10k balance.
I’ll also be the first to admit that I’m lazy, and constantly chasing the highest rate is way too much work for me. Especially when your old bank could be the one with the best rate the next time you check!
So what is my favorite savings account? It’s an account I’ve had since I was in college, and one I really feel is the best on the market even after the big change it’s gone through recently (more on that in a moment).
My Favorite Savings Account (and the one I recommend to you)
is Capital One 360 Savings (formerly ING Direct).
The ING Direct Orange Savings account has long been a favorite of finance nerds (like me) everywhere. They established a great reputation by offering high interest rates, no minimum balances, no fees, great customer service and an overall great product and interface. If you were in the market for a high-yield online savings account, ING is where you ended up.
With all the goodwill built up towards ING Direct over the years, you can understand the concern that arose when they announced late in 2012 that they had been sold to Capital One. Many worried that after the takeover Capital One would institute pesky fees, account minimums, or slash the interest rate.
Well, I’m here to report from the front lines that all is well! Capital One 360 Savings is every bit as good as ING Direct Orange savings was. Outside of the color scheme on the website you’d be hard pressed to find many differences.
In fact, the differences you will notice are all for the better – With Capital One 360 you can now deposit checks via an app on your smartphone. For anyone who travels a lot you can also use your debit card overseas with no foreign transaction fee which has long been a bonus of Capital One’s credit cards. The switch to Capital One also means a larger network of fee-free ATMs (over 40,000 to be exact) when linked with a Capital One 360 Checking Account, so accessing your money when you need it will never be a problem.
The Best Feature of Capital One 360 Savings
The best feature of this account, and the one that (in my mind) makes it stand out far above the rest. Is the ability to create sub-accounts within your main savings account.
This makes it super easy and convenient to keep track of all your different savings goals from the same place.
With a traditional savings account you have one account with a balance of $x. With a Capital One 360 savings account you can have your main account and up to 25 smaller sub-accounts. This means instead of logging in to my account and seeing a balance of $20,000 (for example) I see:
Main Account “Jay’s Emergency Fund”: $10,000
– “New Car Fund” : $5,000
– “Vacation Fund”: $2,000
– “Home Repairs”: $2,000
– “Reckless Spending”: $1,000
You can transfer money between your sub-accounts freely and you can even set up automatic transfers to put aside specified amounts of money into each account so you can reach all of your savings goals on time (and yes, I really do have one labeled “reckless spending”!).
Other Key Benefits of Capital One 360 Savings
- No Fees & No Account Minimums – This is really key if you don’t have a lot of money to open an account with, are just getting started saving or just don’t like having a lot of money sitting in cash.
- Competitive Interest Rate – You might not always have the top interest rate on the market, but you can always be assured that Capital One is offering you an interest rate that is very competitive with the other options on the market.
- Simple to link to other accounts – Being that this is an online savings account it’s important that you’re able to link up to your other bank accounts to transfer money. Capital One makes that really easy regardless as to whether you’re linking to a Capital One 360 Checking account or a checking account with your local credit union. (Although if you want free bill pay
- Mobile Check Deposit – As I said before, I’m lazy. If I can deposit checks sitting in my underwear at home, I’m all for it! (Available on iPhone and Android)
I know Capital One doesn’t have the sterling reputation that ING had, but it’s been about 2 months since ING Direct “officially” changed over to Capital One 360. I’m happy to say that so far all the outrage and worry over the switch has turned out to be much ado about nothing.
That’s not to say things can’t change down the road. Should Capital One introduce some dumb fees or other changes I don’t like I won’t hesitate to drop them for someone better. Never forget that we are customers by choice, and we have plenty of options for our money. Loyalty is a great trait for a dog, but as a consumer it’s not always the best quality to have when a company starts to take you for granted.
Hopefully that’s a bridge that all us former ING customers won’t have to cross with Capital One. I’m very happy with my Capital One savings account so far, and I’d definitely recommend opening an account there if you’re in the market for a new savings account.
Sign Up For Capital One 360 Savings Today!
What is your savings account of choice? What features do you look for when choosing a savings account?
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