Capital One: 11-Month 360 CD Expired

tldr; Capital One froze the interest rate of older, supposedly "high yield savings accounts" at 0.3%. Basically, they silently converted them to low interest accounts.

I've been a customer of Capital One (IngDirect originally) since 2004. I had their "360 Savings account". Capital One claimed it is a high interest account and rates will fluctuate based on Federal reserve interest rates.

Apparently, some years ago they started a new savings account called "360 Performance Savings" with much higher interest rates. The new Performance savings has a interest rate of 3.4% as of today. While the legacy account is only at 0.3% and it stopped fluctuating with Fed rates many years ago.

So I lost a lot of money over the years as my savings account silently turned into a regular savings account and stopped being a high interest account.

They didn't inform established customers of the new Performance savings account and kept people like me at 0.3%. At a minimum, they should have informed existing customers of this new account type.

I learned about this new account a couple of days ago. This is clearly bad faith behavior by the bank. I am in the process of closing out my account. I can never trust Capital One again. You should not do this to long term customers to make a few bucks.

Search online for "womens money capital one cheated high interest accounts" to find other customers that got cheated the same way.

Grace Period: You may redeem your Certificate of Deposit within ten (10) calendar days after the maturity date without penalty.

What happens if you don't redeem within 10 days?

So I started to ladder T-Bills for the reasons everyone is stating in this thread. The rate is so volatile (in a good way) that locking into anything even 12 months is too long for me and rates continue to climb. I use fidelity and my suggestion is this.

When they offer the new 4 week and 8 week and 13 week t-bill (they auction on diff days and diff weeks) go in and buy one of each of them with whatever money you can spare. Let's use 5k for each.

I would buy a 4 week t-bill with NO Rollover for 5k
I would buy an 8 week t-bill with NO Rollover for 5k
I would buy a 13 week t-bill WITH Rollover for 5k

Then after 4 weeks when that first on comes up, buy another 13 week t-bill with the 5k WITH Rollover.
Then after 8 weeks when the second comes up, buy another 13 week t-bill with the 5k WITH Rollover.

Now you will have 3 13 week t-bills rolling every 4 weeks or so and rolling into a new one with the proceeds. This way every 4 weeks you are capturing an increasing rate and not locked into anything longer than 13 weeks. You benefit from the rate hikes, can cash out at any time, and you have state tax shelter from the earned interest.

I can almost guarantee that the above will yield you more net income (taking in tax break) at the end of 11months then the 5% locked CD

just my 2cents

Very easy to get locked out on the TreasuryDirect website and a pain in the ass to get back on. Get Treasuries on another site.

So I started to ladder T-Bills for the reasons everyone is stating in this thread. The rate is so volatile (in a good way) that locking into anything even 12 months is too long for me and rates continue to climb. I use fidelity and my suggestion is this.

When they offer the new 4 week and 8 week and 13 week t-bill (they auction on diff days and diff weeks) go in and buy one of each of them with whatever money you can spare. Let's use 5k for each.

I would buy a 4 week t-bill with NO Rollover for 5k
I would buy an 8 week t-bill with NO Rollover for 5k
I would buy a 13 week t-bill WITH Rollover for 5k

Then after 4 weeks when that first on comes up, buy another 13 week t-bill with the 5k WITH Rollover.
Then after 8 weeks when the second comes up, buy another 13 week t-bill with the 5k WITH Rollover.

Now you will have 3 13 week t-bills rolling every 4 weeks or so and rolling into a new one with the proceeds. This way every 4 weeks you are capturing an increasing rate and not locked into anything longer than 13 weeks. You benefit from the rate hikes, can cash out at any time, and you have state tax shelter from the earned interest.

I can almost guarantee that the above will yield you more net income (taking in tax break) at the end of 11months then the 5% locked CD

just my 2cents

After looking into this for some time , I ended up going a different solution.

So Fidelity allows their brokerage accounts to be used like a bank account (comes with checks, debit cards, account/routing numbers, accepts direct deposits, etc. Exactly like a bank account, because they actually make it into a bank account on the back end).

Anyways, I have a separate brokerage account that is my "bank account" paying all of my credit cards/bills. The "core position" is just the default SPAXX, which is currently receiving 4.02% 7 day yield with a 0.42% expense ratio, and is made up of 72% "U.S. Government Repurchase Agreements."

Tbh, idk the difference between repurchase agreements and tbills, but let's say SPAXX has a net of 3.5% vs this whole tbill/savings account thing with 5.0%. That's a 1.5% difference, but comes with a lockup period, some minor management, can't pay credit cards/bills with it, limitations on transactions, etc.

At $100k cash, thats only $1.5k extra, for a whole lot of inconvenience.

Anyone have opinion on this method vs laddering?

After looking into this for some time , I ended up going a different solution.

So Fidelity allows their brokerage accounts to be used like a bank account (comes with checks, debit cards, account/routing numbers, accepts direct deposits, etc. Exactly like a bank account, because they actually make it into a bank account on the back end).

Anyways, I have a separate brokerage account that is my "bank account" paying all of my credit cards/bills. The "core position" is just the default SPAXX, which is currently receiving 4.02% 7 day yield with a 0.42% expense ratio, and is made up of 72% "U.S. Government Repurchase Agreements."

Tbh, idk the difference between repurchase agreements and tbills, but let's say SPAXX has a net of 3.5% vs this whole tbill/savings account thing with 5.0%. That's a 1.5% difference, but comes with a lockup period, some minor management, can't pay credit cards/bills with it, limitations on transactions, etc.

At $100k cash, thats only $1.5k extra, for a whole lot of inconvenience.

Anyone have opinion on this method vs laddering?

tldr; Capital One froze the interest rate of older, supposedly "high yield savings accounts" at 0.3%. Basically, they silently converted them to low interest accounts.

I've been a customer of Capital One (IngDirect originally) since 2004. I had their "360 Savings account". Capital One claimed it is a high interest account and rates will fluctuate based on Federal reserve interest rates.

Apparently, some years ago they started a new savings account called "360 Performance Savings" with much higher interest rates. The new Performance savings has a interest rate of 3.4% as of today. While the legacy account is only at 0.3% and it stopped fluctuating with Fed rates many years ago.

So I lost a lot of money over the years as my savings account silently turned into a regular savings account and stopped being a high interest account.

They didn't inform established customers of the new Performance savings account and kept people like me at 0.3%. At a minimum, they should have informed existing customers of this new account type.

I learned about this new account a couple of days ago. This is clearly bad faith behavior by the bank. I am in the process of closing out my account. I can never trust Capital One again. You should not do this to long term customers to make a few bucks.

Search online for "womens money capital one cheated high interest accounts" to find other customers that got cheated the same way.

Found this video explaining how to click through Fidelity to do what mblock suggests.
https://www.youtube.com/watch?v=i...ZVM&t=332s [youtube.com]

Here's a hack that not everyone thinks about. Break the amount you lock in a CD into smaller amounts.

For example, if you are doing a 500k CD, do 5 100k accounts. That way, if you need 100k or less before term you only get 1/5 the penalty as you only have to break one smaller CD.

Do you buy it on Treasury Direct or Brokerage?

tldr; Capital One froze the interest rate of older, supposedly "high yield savings accounts" at 0.3%. Basically, they silently converted them to low interest accounts.

I've been a customer of Capital One (IngDirect originally) since 2004. I had their "360 Savings account". Capital One claimed it is a high interest account and rates will fluctuate based on Federal reserve interest rates.

Apparently, some years ago they started a new savings account called "360 Performance Savings" with much higher interest rates. The new Performance savings has a interest rate of 3.4% as of today. While the legacy account is only at 0.3% and it stopped fluctuating with Fed rates many years ago.

So I lost a lot of money over the years as my savings account silently turned into a regular savings account and stopped being a high interest account.

They didn't inform established customers of the new Performance savings account and kept people like me at 0.3%. At a minimum, they should have informed existing customers of this new account type.

I learned about this new account a couple of days ago. This is clearly bad faith behavior by the bank. I am in the process of closing out my account. I can never trust Capital One again. You should not do this to long term customers to make a few bucks.

Search online for "womens money capital one cheated high interest accounts" to find other customers that got cheated the same way.

I got a message to, "Let's start your first deposit," which gave me the option to transfer funds from another Cap One account into the new CD but when the CD was opened, the amount I wanted to transfer from the other Cap one account disappeared and only the amount from an external account appears. Has anyone else had this issue? Is there a delay in transferring from the other Cap One account? Thanks in advance for your help.