bank rates

Capital One’s Offering A Bunch Of Savings Account Deals … Which Is Best For You?

If you’re considering opening a savings account with Capital One Bank, you’ll quickly find it’s all about location, location, location.

Just look at the special introductory rates being offered to customers at its more than 800 branches, mostly in New York, New Jersey, Maryland, Virginia, Louisiana, Texas and the District of Columbia.

By putting different ZIP codes into its website, we found introductory rates on balances of $10,000 or more that run from a high of 1.25% APY in the New York City area to 1.10% in the Washington area to 0.75% APY in lots of other places, including New Orleans, Dallas and Austin.

We asked Capital One why on earth savers in the Northeast are being offered a better deal than those elsewhere.

“We determine our promotional rates by looking at the competitive environment, including market rates, to ensure we’re offering market-leading, compelling products for customers,” a spokeswoman told us.

Whatever the introductory rate might be for the Essential Savings Account, it’s guaranteed for six months and then reverts to the bank’s regular rate of “up to 0.25%.”

To earn that full 0.25%, however, you must have at least $100,000 invested in the account. Anything below that earns 0.15% APY or just 0.10% APY (if the balance is less than $10,000).

So, best case scenario, you live where the initial rate is 1.25% APY and have more than $100,000 to leave with Capital One, your return for the first full year averages out right at 0.75%.

But wait. The online savings account offered at the Capital One 360 website pays everyone 0.75% APY with no minimum balance requirements or fees.

It seems the savings account promo Capital One is offering through its brick-and-mortar banks doesn’t really match its online 360 Savings account.

OK, if you’re only looking for a short-term place to stash your cash until the Federal Reserve starts raising interest rates, an Essential Savings account may make sense for New York area residents, but it’s not a place to put your money for the long haul.

And by “long haul” we mean more than nine to 12 months.

If you really want a short-term savings account that you’ll ditch sometime next year, consider the best nationally available deal on our Savings Account Leaderboard.

Palladian PrivateBank pays everyone, regardless of where they live, 1.30% APY for six months and then 0.90% APY after that, for a combined annual return of 1.10% APY.

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