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Capital One Ending Costco Savings Account

A little over two years ago, I saw that Costco and Capital One had a partnership [3] in which you could earn a reasonably good interest rate on a high yield savings account [4]. The kicker was that you’d get bonus for opening an account plus a 10% quarterly bonus on the interest you earned, which made it competitive.

Then Capital One bought ING Direct [5] and I figured it was only a matter of time before Capital One’s Direct Banking (their name for their online banking services) would be merged with ING Direct. It turns out that would take about one year because I received the following email this morning:


We are sending this message to inform you that, due to Capital One®’s recent acquisition of ING DIRECT USA, Costco and Capital One have mutually agreed to end our seven-year partnership bringing you savings accounts and CDs.

Costco and Capital One are fully committed to minimizing changes to your banking experience. Specifically, you will:
• Continue to have secure access to your account through the Capital One website.
• Keep the same account number(s), login(s), and password(s).
• Have access to the same award-winning customer service via the Capital One call center.

As a savings customer, you will continue to receive the preferred Costco rates on your account until December 31, 2012. After this date, your account will automatically become a standard Capital One account and earn the standard Capital One rate.

Capital One customer service representatives are here to help, so please feel free to call 1-888-810-4013 if you have any questions at all.

Thank you very much for using Capital One for your banking needs.

Mark Elliot
Capital One Bank®

Paul Latham
Costco Wholesale

It’s unclear what the “standard Capital One account” means but if it’s their “Smart Savings Account” then I can expect to earn 0.60% APY, rather than 0.75% (plus 10% quarterly) the account currently earns.

I’m not sure what I’ll do but by the end of the year I’ll certainly have closed my Capital One account. The rates at other banks aren’t high enough to entice me to move our funds there but this change is enough to overcome inertia.