Although we hope the biggest CD stories of 2015 are still to come — when the Fed finally starts raising interest rates — today’s news is definitely the biggest surprise we’ve seen this year.
One of the country’s largest banks, Capital One, has raised several of its online CD rates so dramatically that it’s vaulted from barely-worth-checking status to an astonishing tie for the lead in nationally available 36-month returns, paying 1.50% APY.
It now shares the top spot for 3-year CDs on our CD Rates Leaderboard with American Bank and Synchrony Bank.
Offered only online through its Capital One 360 website, the bank boosted its returns from:
- 0.40% to 1.10% APY on 24-month CDs.
- 0.70% to 1.50% APY on 36-month certificates.
- 0.90% to 2.20% APY on 60-month certificates.
The 5-year yield ties Capital One for third on our Leaderboard.
Note that these rates are not available through Capital One’s nearly 900 branches throughout Virginia, New York, New Jersey, Texas, Louisiana, Maryland and the District of Columbia.
Indeed, the 36-month and 60-month rates available at Capital One branches are currently 0.35% and 0.60% APY, respectively.
To say we’re not used to seeing banks as big as Capital One — currently the nation’s ninth-largest bank by total assets — on our Leaderboard is an understatement.
It’s the only Top 20 bank you’ll find, and Synchrony is the only other Top 50 bank on the Leaderboard.
That’s because deposit rates at the big banks tend to be, well, pathetic. The four biggest banks — Chase, Bank of America, Wells Fargo and Citibank — are reportedly trying to shed deposits rather than attract them.
Across these four titans, the average 36-month CD yield is a pitiful 0.28% APY.
Capital One 360 was originally known as ING Direct until it was sold in 2011 and folded into the Capital One brand.
Although ING Direct took a turn on our Leaderboard back in 2009, it lowered its rates before the Capital One acquisition to the same yields Capital One 360 was paying earlier this week — sitting unchanged at those mediocre-or-worse levels for about five years now.
No wonder we’ve never had anything good to say about Capital One’s CDs before now.
But why such eye-popping increases? And why this week? Who knows, but we are more than thrilled to welcome a “Big Bank” to the club.