Getting more bait in Capital One 360 savings’ bait and switch

The interest rate on my Capital One 360 money market savings account went up to like 1.8 for a while but has been steadily dropping and is now at 1.5%.  I hadn’t heard of any big interest rate cuts and I’d seen ads for higher rates with other companies, so I decided to see what’s going on.  Surprisingly, I noticed that Capital One 360 is only advertising a Premier online savings account that has an APY of 1.7%.  Which … is higher than the 1.5% we were currently getting.

So I called up the company and got a very nice customer service representative– like extremely nice and extremely knowledgeable, who explained that they no longer offer the money market account to new customers and the new account doesn’t have a debit card, but we weren’t using any sort of card with the account anyway.  Then I asked if I could switch over, and he explained how to do that and then walked me through and closed out my old account.  It took maybe 8 minutes, and much of that was because I had to close Firefox and start over in Chrome (Firefox at work needs to be updated).   All in all a simple and almost pleasant experience.

What’s not pleasant is having to keep an eye on one’s rates because they’ve decided to lure people in with high initial interest rates but then drop the interest rates after people stop paying attention while offering new customers a different product with higher rates.  That part kind of sucks (I estimate I lost at least $40 before noticing).  But… they’re paying for really high quality customer service reps, so…

Have you been the victim of a bait and switch?  How are your online savings accounts doing these days?

29 Responses to “Getting more bait in Capital One 360 savings’ bait and switch”

  1. Leigh Says:

    That is annoying of them! We are at 1.6% with Alliant Credit Union right now. We have some other savings at the bank with our mortgage, but they keep dropping the rate and I only find out on the statement. It’s sort of annoying but I’ve been trying to keep 6-12 months of mortgage payments there so I don’t have to transfer from our main account every month.

    • nicoleandmaggie Says:

      It’s funny how they always let one know about interest rate increases but don’t advertise the decreases.

      • Leigh Says:

        Alliant actually emailed after a few months of rate drops to talk about what was going on and posts their rates on their website. This other bank has done neither of those things.

    • Debbie M Says:

      I’m with Alliant, too. I used to rate hop, but then the new place would always go down to near or below my original place, so in the end, I went back to the original place, which I trusted more, and I preferred the simplicity of not having to pay attention, plus when you transfer money it’s earning zero for several days while they’re pretending it’s not anywhere. Then they got bought. Then I decided to move to all credit unions if possible, so now I’m just with Alliant.

      My worst bait-and-switch was with Chase credit cards which would keep changing their rewards structure. I once had two different ones that both changed until they matched each other. Grr. Now I’m just with Alliant which turns out to be 2% cash back on all purchases, better even than Capitol One (1.5% on everything when I had them), and again I like the simplicity of just one card.

      • Leigh Says:

        I’m fine with having my savings account at the same place as my checking account so I really love Alliant! I also love how easy credit unions make it to transfer between members, which is helpful when my husband and I have separate and joint accounts.

      • Debbie M Says:

        Yes, transferring between members at the same place is fabulously instantaneous (at least at my local credit union, which is the only place I’ve tried)!

  2. middle_class Says:

    I swear that Ally bank has informed me of decreases in interest rate. But now I nees to doubled check…

  3. Revanche @ A Gai Shan Life Says:

    I think Ally has informed us of one or two decreases in the past but I don’t think they told us about the recent ones. If the rate decrease matches the decreases that happen at other banks generally then I tend not to think of as a bait and switch as much. But I do get very annoyed when they do this thing of creating the new product and then refusing to match their own rates. I have a defunct Online Savings Account with Ally that I don’t use because they did that. There is literally no difference between the old and the new savings accounts that I have with them except the bizarrely low interest rate on the old one. That reminds me to go close that now.

  4. bethh Says:

    Right now I have a complicated setup:
    – I have a month of net income in a savings account earning 0.1% at USAA. This amount represents 2 leanish months of expenses (paying bills and eating healthily but inexpensively). (My job is as secure as anything – solid unless some serious problems emerge in the world.)
    – I’ve got a chunk of money (~5-6 months expenses) sitting in a Vanguard money market fund. Right now the one-year return on the money market fund is 2%. I think of this as my emergency fund.
    – I’ve got another chunk (~4 months expenses) in the stock market. I think of this bucket as my roof/water heater/furnace/major appliances replacement fund (it can fund two or so of the larger items).

    I’ve thought about trying to rate-hop, at least with that month of gross income (which I’m adding to monthly), but I’m also thinking of using that toward paying down my mortgage, which is at a 3.35% rate. It would be very psychologically satisfying to use it that way, and better mathematically than a saving account or the money market fund. I could also put it in a Roth – I’m in pretty good shape on my retirement savings so am not sure that’s the best place for the money either.

    I just haven’t seen any tales from the savings account trenches that make me think it’s worth the effort. Am I missing something? I do truly want to know how others approach these decisions.

    • nicoleandmaggie Says:

      Huh… I could put money in a Vanguard money market… currently I only have that for temporary settlement fund money before it turns into something else. It looks like my rate is only 1.5% though.

      I think rate hopping is only worth it for us if they give a nice signing bonus (which is why I opened this capital one to begin with) or if it takes like 10 minutes to make the change (as it did with moving from one Capital One 360 account to another).

      • bethh Says:

        I’ll keep an eye out for good offers for savings account signing bonuses, the few I’ve seen require more work than I want to put into it (like using direct deposit or bill pay or ATM activity). I get that their motivation is to get us enmeshed in their services, so that makes sense.

        I’m in Vanguard’s VMMXX fund – the 7-day yield is 1.61% and at the end of January, the previous year’s return was 2.16%. I don’t know what piece of data is the best one to use to assess the performance of the fund. Still, even 1.5% without having to rate-hop seems pretty okay to me!

      • nicoleandmaggie Says:

        Yeah, usually rate chasing looks like too much work. This 360 account was pretty easy and there weren’t strings and I see it whenever I login to my credit card. Someday I may drop Wells Fargo as our national bank, I dunno.

      • Leigh Says:

        You might be in a tax-exempt money market fund – that’s what I’m in. Its rate is pretty comparable to my Alliant savings account at my tax bracket.

  5. Michael N Nitabach Says:

    Yeah, I was in 2.7% Capital One CD last calendar year & this year I could only roll it to 2.0%. I was thinking, maybe I’ll take the 1.7% regular savings & added liquidity. But I figured (1) I don’t really need the liquidity & (2) tomorrow they could lower the regular savings rate to 0% if they felt like it, whereas I’m guaranteed 2.0% for the year. So I took out $2.7K to buy perfumez & clothez, rolled the $100K CD principal back over at 2.0%. Capital One seems pretty good, but I have no idea what they’re like if you ever need actual customer service.

    • Michael N Nitabach Says:

      Should’ve noted that maximum APR offered on CDs right now (looks like by all banks) is for 12 month term; both shorter & longer terms are lower rates. So I was in 12 month last year & 12 month this year.

    • nicoleandmaggie Says:

      … you keep 100K in CDs?

      I guess we’ve been guilty of keeping that much in cash, but only right before going on leave or DH losing his job. And a CD is better than low interest savings. Wow that’s a lot of money though.

      • Michael N Nitabach Says:

        I mean I don’t even wanna tell you what I’ve got in zero interest checking acct (less then 100K tho!). We’re not super efficient w this stuff…

      • nicoleandmaggie Says:

        We’ve got quite a bit in our credit union which has pretty low interest, but that’s like, emergency money and monthly money.

      • bethh Says:

        That was my first thought too! That’s a lot of money returning not much!

        I’ve been reading more and more about people who are getting close to retiring, and how they are keeping 2-3 years’ worth of spending money very liquid so they don’t have to pull from their retirement accounts right away. So I have hopes of having money like that sitting around before I retire! But that’s quite a way out, and before then I may get a better handle on what people are actually doing with their cash/nearly-cash pre-retirement savings.

      • Michael N Nitabach Says:

        My 2% CD looken pretty decent RN! 😹😹😹

  6. First Gen American Says:

    I’ve been finding this regularly at my supermarkets. They offer some deal and there’s a big ol sign that has a low price, but then you have to download some app and use an online coupon and spend a minimum of $25 and limit 2….half the time I don’t tick all the boxes and end up buying the thing at a higher price anyway but it annoys the hell out of me.

  7. First Gen American Says:

    I have a stupid amount of money in cash right now because I was just consolidating my retirement accounts and cashed in all my cats and dogs to simplify. I have been super aggressive in the market having almost everything in stocks up until 2 months ago but now that I am close to hitting my magic retirement number I am paranoid of another 2008. I’ve been surprisingly gun-shy to buy back in, even on a day like today when the market was down 3%.

    My industry is usually a leading indicator of economic downturns and we’ve been down double digits for over a year, as has the whole sector. I scratch my head about why there hasn’t been a bigger correction. Maybe the stock market doesn’t follow manufacturing trends anymore. I realize I am rusty with this stuff as I’ve been just dollar cost averaging every paycheck to my retirement goals but I guess I need to start looking at this stuff more closely again.

  8. First Gen American Says:

    We have a lot of old people in our community and it’s just so frustrating for them too because they want that lower price and don’t understand why it’s advertised when you don’t give it unless you jump through 27 hoops. The cashiers often commiserate about how most of those folks don’t even own smart phones. I did learn that some stores have a code you can punch in for those people to go around the process.

  9. becca Says:

    I’m in the process of moving a chunk of Efund over to Chase for a few months to get the $600 bonus (and piddly interest, which is why it will not stay there). I have had an account with them in the past, but they are not my favorite.
    I actually pulled the trigger on Chase, despite intending to go with a local chain, because I knew they’d do the Medallion Signature Guarantee for me if I had a deposit account with them. I have needed those exactly twice in the last decade, both times to deal with straggling bits of my Mom’s estate. But I happened to need one and when I went to find my code for the account bonus, the online opening of the account was so easy I went ahead.

    Usually, I keep my E fund in my credit union accounts were I get 3% interest most months. Sometimes I don’t get enough transactions on the second one, but I do often enough it comes out ahead of Ally. In a month like December, I sometimes get 5% on the 10k account (because I met the extra extra hoops).
    It turns out that having an incentive each month to make many small transactions probably increases my spending, but also my happiness. So I totally understand why people don’t set up their accounts like this just to get the 3%, but I like it.


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