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Costco/Capital One InterestPlus Online Savings Account

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Costco SignCostco and Capital One have joined forces to offer an InterestPlus Online Savings account that offers a fairly competitive 1.50% APY. It doesn’t appear that a Costco membership is required for this account but there is an incentive for members. If you are an Executive, you can get a $60 bonus. If you’re a Gold Star or Business member, then it’s only a $20 bonus. In terms of bonuses, these are probably the best you can expect for an online savings account but brick & mortar checking account bonuses (where you need to setup direct deposits and make bill pays) will usually pay far more (without a third party paid membership requirement).

This offer is attractive if you don’t already have an online savings account and you are already Costco member.

The negatives? (I always like the bad news first)

  • The fairly steep $5,000 minimum deposit, when most online savings accounts have much lower minimums.
  • The bonus is not enough of an incentive to open this account, $60 on a $5,000 deposit is 1.2%. With an ING Direct referral, you can open an ING Direct Orange Savings account with $250 and get $25.
  • Capital One’s other deposit products aren’t special. Compare their CD rates to the best CD rates we maintain and you’ll see they aren’t that competitive.

The positives?

  • If you don’t have an online savings account and you can handle the $5,000 minimum, this isn’t a bad one to use. if you have a Capital One account you can link directly to this InterestPlus account, that makes it an even better deal for you since you can transfer funds instantly.
  • $60 bonus for Costco Executive Members, $20 for Gold and Business Members; when you deposit $5,000 into the account within 30 days of opening ($5,000 is the minimum deposit to open).
  • 10% quarterly bonus on interest earned for the previous month if you maintain at least a $15,000 balance in the account. It makes the APY, assuming the 10% bonus is paid out at exactly 4 weeks, a little less than 1.62%.
  • No fees, $5,000 is the minimum needed to earn interest but you aren’t charged a fee if your balance falls below that.

What do you think of this offer?

(Photo: greenwenvy)

{ 27 comments, please add your thoughts now! }

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27 Responses to “Costco/Capital One InterestPlus Online Savings Account”

  1. jsbrendog says:

    being a costco member ocmes with many added benefits, some of which are very good (renting cars for example) but this one just seems to be a whole lot of meh

  2. Mark says:

    Huge Costco fan, so many advantages and services that many dont know of (insurance, car program, tickets and giftcards). But to be honest I agree with jsbrendog, this just isnt that special. Stick with ING Direct.

  3. Marx_ says:

    My wife and I looked into opening this account when we first got our Costco membership, but ultimately the numbers did not work out because we could find other deals that offered a better return. Nevertheless, it did remind us that it is sometimes okay to say “no” to some deals.

    • sam Park says:

      Would you please share the other better deal with us? The info will be greatly appreciated….

  4. CK says:

    5K min to earn 1.5%, no thanks.

  5. lostAnnfound says:

    I think I’ll stick my ING account. I like the “no minimum” plus I can make money with referrals.

  6. Ryan says:

    Yikes, that’s a lot of dough up front. I signed up for Costco membership soley to get a great deal on a honeymoon trip to Hawaii. Since then we have gone once or twice a month for bulk items, they do have some pretty good deals. The checkout lines are terrible however and self checkout is even worse.

  7. ziglet19 says:

    Wow, not the best deal in terms of on-line savings, but it’s good to always know about all the options. Thanks.

  8. Yeah, this is not a very high rate for such a large minimum. Costco offers a lot of great offers beyond just their warehouse store, but this just doesn’t seem like one of them.

  9. javi says:

    Not worth the extra time and money to chase after this rate. I’ll keep my money with ING.

  10. govenar says:

    Not that great of a deal. But one thing I’ll add is that if someone is going to open it and only has a Gold membership, you can upgrade to Executive first for basically free (they’ll refund the difference to you after a year if you didn’t make earn more cashback than the cost of upgrading).

  11. Shirley says:

    It’s good to see the competition, but I’ll stick with ING for now.

  12. Bev says:

    I think its a great way to get $60 free dollars if you are already a Costco member (especially an Executive one) and you have $5000 you would like to save for an emergency fund. The rate also compares well with other top institutions for a deposit of $5000.

  13. eric says:

    Much higher reserve requirement than I thought. I think most would pass…

  14. Ken says:

    This is one of the top 10 listed at fatwallet, and no requirement to go through different hopes, like required direct deposits of debits.

    Anything over 1.5% is good right now. Costco gets you some extra money vs signing up direct at cap1 site.

    We just moved our house savings over, from a .5% at chase to here, and will earn us much much much more.

  15. Kimberly says:

    We just upgraded to Executive a couple weeks ago, so this is a tempting way to get back our $50 upgrade fee, plus $10. But I really love the simplicity of having all of our accounts at one bank (ING Direct). I’ll think about it.

  16. Maury says:

    They make it sound like 1.5% is something out of this world and they want to tie up 5K of your money with this measly rate? lol Good luck.

    Savings rates will eventually creep up to the 5% level and higher, so don’t lock up your money with measly rates for more than a year.

  17. hs says:

    just to clarify (i’m researching this for our family’s savings)…
    the money ($5k or more) isn’t LOCKED up. this isn’t a CD. it’s the minimum to earn interest. over 10k earns the bonus interest. under 5k earns 0%.
    no penalties or fees so long as you do business online (and don’t call).
    first 30 days there are long waiting times for the money to transfer, etc., but we’re just looking to move a lump sum and that’s it, so wait times aren’t an issue.
    it sounds like a good account, and i trust costco. i like the idea of earning the higher % compared with our current 0.6% (oy vey).
    i’m going to look at ing now based on comments read here…

  18. hs says:

    ok, after digging further the account that looks the best to me is smartypig.com.
    would love to hear pros/cons of parking some cash in this account for a while…

  19. Erin says:

    Ally has 1.25% rate- we switched from ING b/c everything else is the same, just a slightly higher interest rate. Used to be much higher, but like everything else in this economy it slowly dropped too…

  20. Phyllis says:

    After reading all the comments it still seems like the Costco savings is the best (if one is an Executive member). I didn’t find any definite recommendations from anyone regarding an higher interest rate. Checked out smartypig.com and it appears to be a lot of questions for just putting money into a higher yielding account. They seem to be more directed to having one transfer funds to other sources (e.g. retail vendors)once a goal is reached. I just want a sound place to put funds where I can get a better return than the pathetic amount that Wachovia gives its clients. I also am definitely not interested into putting any money into a CD. So those of you who seem to feel that Costco is not the best PLEASE post who is.

  21. hs says:

    SmartyPig is by far the best place to just park some cash (under 50k).
    There are a bunch of silly hoops (like creating “goals” and such) but it’s not a big deal. Ultimately, your money is FDIC insured and it’s gaining the largest interest rate out there.
    And there’s no minimum, just the maximum… so we opened two accounts (one per person) to get past the maximum.
    It’s at 1.75% right now.

  22. Phyllis says:

    Thanks for the response. Will visit the site again and give it more serious thought.

  23. Anonymous says:

    hey what is an ing account?

  24. John C Scott says:

    I would like to hear more about this program

  25. Vinkus says:

    hey so this is actually a good deal now right? since interest rates are weak now, im reading all the comments on this board but they are from Feb 2010 —-


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