Capital One 360 Performance Savings Account Interest Rate 2024

Capital One savings account interest rates

The Capital One 360 Performance account is a high-yield savings account.

This means that it offers a much higher interest rate than a traditional savings account. According to the National Credit Union Administration, it’s common for banks and credit unions to offer rates lower than 1%, thus making it difficult to grow your account balance. A high-yield savings account gives you access to much better rates.

As of April 2024, the Capital One 360 Performance Savings Account has a variable APY of 4.25%. APY stands for annual percentage yield. It’s the amount of interest you earn if you leave your money in a savings account for a full year. Capital One doesn’t offer tiered rates, so you get the same rate whether you have a balance of $500 or $500,000.

This high-yield savings account also has no minimum deposit requirement, no minimum balance requirement and no withdrawal limit. However, Capital One does reserve the right to require you to give seven days’ notice before you make a withdrawal. Per the company’s terms of service, this “hardly ever happens,” but be aware that Capital One does have the right to require advance notice of withdrawals.

Best of all, the Performance Savings Account has no monthly fees or maintenance fees. You can open a Capital One account online or visit a local branch to discuss your needs with a banker.

Capital One 360 Performance Savings Account Interest Rate & Fees

How much can I earn with the Capital One savings account?

With Capital One, your APY is compounded and credited monthly, making it a little easier to reach your goals. 

Here’s an example of how monthly compounding benefits you.

Let’s say you deposit $2,000 into your high-yield account. To calculate how much interest you’ll earn per month, you need to divide your APY by 12. In this case, it works out to 0.3625% (4.25% divided by 12). Now divide 0.3625 by 100. That’s 0.003625.

Now comes the fun part. To determine your interest earnings for the month, multiply your balance ($2,000) by 0.003625. That works out to about $7.25. This is your interest earnings for the first month.

Once Capital One credits the interest to your account, you’ll have $2,007.25. Assuming you don’t add more money to your high-yield savings, you’d multiply $2,007.25 by 0.003625 to figure out your interest earnings for the second month. This works out to just under $7.28, bringing your total balance to about $2,014.53. Every month, you earn a little bit more thanks to the magic of compounding.

Here’s another example to show you how much you can earn if you make regular deposits.

Assume that you deposit $1,000 when you open your account and $100 every month thereafter. During the first month, you’d earn $3.63 in interest ($1,000 x 0.003625), bringing your balance to $1,003.63.

Once you deposit your first $100, your balance becomes $1,103.63, increasing your interest earnings to $4.00 ($1,103.63 x 0.003625) for the second month. This gives you a balance of $1,107.63. As long as you keep adding money and letting the interest compound, your balance will keep increasing, allowing you to grow quite the nest egg.

Factors that affect your earnings

Many factors affect the amount of interest you earn with a savings account:

• Opening deposit: The more you deposit into your savings account, the more interest you’ll earn. In the scenario above, you earned a little over $7 per month in interest with an initial deposit of $2,000. Let’s do the math to see how much you’d earn if you deposited $10,000. When you multiply $10,000 by 0.003625, you get $36.25. Even if you never deposit another penny, you have the potential to earn more than $400 in interest during the first year.
• Account history: Your earnings depend on how much money you deposit each month and how much money you withdraw each month. If you deposit money into your Capital One 360 Performance Savings Account every month and never take any out, you’ll earn much more than you would if you used the savings account to pay household expenses.
• Time: The longer you keep your account open, the more interest you’ll earn. This is because Capital One compounds your APY monthly. As shown in the scenario above, your balance will keep growing as the interest compounds.

The table below has a few examples to show you how compounding works in real life.

How the Capital One savings account interest rate compares

Capital One blows many traditional banks out of the water when it comes to the interest rate on the Performance Savings Account.

As noted previously, Capital One offers an APY of 4.25%. According to the Federal Deposit Insurance Corporation (FDIC), the interest rate on traditional savings accounts is averaging 0.58% as of December 2023. That’s a huge difference.

The average savings rates published by the FDIC are based on the $2,500 account tier. You may earn a little more if your savings account has a large balance, but most banks still can’t beat the interest rate on this high-yield savings account from Capital One. Additionally, because Capital One 360 gives you the same rate regardless of your balance, it doesn’t matter if you deposit $1,000 or $10,000. You can still benefit from the same APY, maximizing your earning power.

Compared to other big banks, Capital One is extremely competitive. A few banks offer higher savings account interest rates, but they may charge maintenance fees or have high balance requirements. Capital One offers a high interest rate without any fees, giving you the best of both worlds.

For example, CIT Bank Platinum Savings Account offers an APY of 5.05%. However, you can only get 5.05% if you maintain a balance of $5,000 or more. Not everyone has $5,000 available, so not everyone can benefit from the higher interest rate. If this describes your situation, you’re better off opening a Capital One savings account.

Is a Capital One savings account right for you?

This high-yield option may be right for you if you’re looking to maximize your interest earnings without paying fees or having to maintain a minimum balance. 

Capital One is a well-established bank with branches all over the United States. If you’re looking to open a savings account with one of the most trusted brands in banking, consider taking advantage of the high-yield savings option at Capital One.

Consider these pros and cons before opening an account.

How to open a Capital One savings account

If you think Capital One is a good fit for your needs, take these steps to open a Performance Savings Account.

• Visit the Capital One 360 Savings Account landing page.

• Click “Open account.”

• Log in to your existing Capital One account, if you have one. Otherwise, click “No” when prompted to log in.

• Click “I have a promo code” if you have access to a promotional offer. Otherwise, click “Continue.”

• Provide your name, contact information and other required details. If you don’t have your Social Security number memorized, make sure you have your card nearby as Capital One is required to collect your SSN as part of the account creation process.

• Agree to the terms and conditions.

• Answer the question about IRS backup withholding.

• Follow the prompts to finish setting up your account.

Other Capital One savings options

If this Capital One 360 savings account isn’t a good fit for your needs, here are a few other options to help you reach your financial goals:

• Capital One 360 Certificate of Deposit (CD): A certificate of deposit is a special type of savings account. Instead of putting money into a savings account every month, you open a CD for a fixed term. That term may last for a few months or a few years. As of April 2024, Capital One is offering an APY of 4.00% to 5.00%, depending on the length of your term. One of the benefits of opening a CD is that you know exactly how much money you’ll earn over time.
• Capital One 360 Money Market Account: A money market account combines the features of a savings account with the ability to make payments directly from the account. This eliminates the need to withdraw funds and deposit them in a different account every time you want to make a large purchase. As of April 2024, a Capital One 360 Money Market Account has an APY of 0.80%. This APY is variable, so it may change at any time.
• Capital One Kids Savings Account: This savings account is designed for kids, but it leaves you in charge of the deposits and withdrawals. As a result, it’s a good fit for guardians who want to teach their children about managing money. As of April 2024, the Capital One Kids Savings Account has a variable 2.50% APY.