Update: January 25, 2018. E*TRADE has agreed to purchase the assets of Capital One Investing (brokerage accounts only, no other Capital One accounts will be affected). The deal is scheduled to close sometime in Q3 of 2018, subject to regulatory approval (source). We will update this overview when we have more information about how this will impact Capital One Investing account holders.
A Brief History of Capital One Investing: ShareBuilder was acquired from ING Direct in early 2012 when Capital One purchased the US assets of ING Bank, which included ING Direct (now Capital One 360), ShareBuilder (now Capital One Investing), and ING Direct Business (now Capital One Spark Business). ShareBuilder was rebranded as Capital One Investing in 2015. Much of this review is still current, but now reflects the Capital One Investing brand instead of ShareBuilder.
Several people have asked me how Capital One Investing compares to some of the other online brokerages, such as Ally Invest (formerly TradeKing) and TD Ameritrade. Capital One Investing is consistently rated in among the top online brokerages and this review should give you a good idea about the pros and cons of investing with Capital One Investing.
Capital One Investing is owned by the same parent company that owns Capital One 360, one of the most popular high yield savings accounts. One of the nice features about this is the ability to link your Capital One 360 account with your Capital One Investing account. But more on that later. Let’s jump into what makes Capital One Investing an attractive option.
Capital One Investing’s claim to fame – automatic investing
Capital One Investing is unique among discount brokerages because they promote automatic investing more than day trading. The folks at Capital One Investing believe the path to wealth is by growing your shares through long term investing, automatic investments, and dividend reinvestments, not short term investments or day trading. To encourage automatic investing, Capital One Investing offers very attractive rates for automatic trades and also allows fractional share purchases, so every penny of your investment goes toward purchasing the stock.
Select your Capital One Investing account level
Capital One Investing has 3 plan options for customers. They are the Basic Plan, the Standard Plan, and the Advantage Plan. The Basic plan is free and offers $4 automatic investments, which places Capital One Investing among the least expensive options among online brokers. The Standard Plan costs $12 per month and offers 6 free automatic investments an additional automatic investments at $2 each. The Advantage Plan is a little pricier at $20 per month but offers 20 automatic investments with additional investments for $1 each.
Real-time trades and options trades cost the same regardless if whichCapital One Investing plan you choose. Capital One Investing also offers free trades for a wide variety of ING owned mutual funds.
Here is a quick breakdown of Capital One Investing plan options and pricing. For more pricing information, visit the Capital One Investing home page.
| Capital One Investing Price Plan | Basic | Advantage |
|---|---|---|
| Automatic Investments Included with Program | None | 20 per month |
| Additional Investments | $4 ea. | $1 ea. |
| Base Fee | None | $20/month |
| Real-Time Trades | $6.95 | $6.95 |
| Options Trades | $6.95 +$.75 per contract | $6.95 +$.75 per contract |
Opening a Capital One Investing Account
Opening a Capital One Investing account is easy and only takes about 10-15 minutes. You will need to have the standard information required to open any financial account, including identification, address, SSN, employer information, trading experience, financial information, etc.
Transferring Money and Making Trades
Transferring money. Capital One Investing offers the usual money transfer methods, including ACH, wire transfers, checks, etc. Capital One Investing also offers Express Funding, the option of placing a real-time order and transferring funds from your bank account to cover the cost of the trade. The Express Funding service costs $5.00 per trade but is free if you link your Capital One Investing account with the Capital One 360 high yield checking account (you can link your Capital One 360 savings, checking, and Capital One Investing accounts). This is a great option compared to some brokerages where you may need to wait 5 days to have access to transferred funds.
Making Trades with Capital One Investing. Trading on the Capital One Investing platform is easy and intuitive. It is easy to set up automatic transfers to your brokerage account and set up automatic investments. Capital One Investing also offers the full range of brokerage services in addition to automatic investing, including real-time trades and real-time research and information, options and margins trades, mutual funds, ETFs, Dividend reinvestments, partial share purchases, and more.
Capital One Investing’s Research and Education Center
Research. Capital One Investing has quite a few research tools available, however, it must be noted that some of them are Premium Tools which are only available to account holders who have the Standard or Advantage accounts. At $12 and $20 respectively, I decided not to sign up for them (once you leave the Basic Account, you cannot go back).
Some competitors, such as Ally Invest, make all of their resources available to all account holders without additional fees. One of the more fun tools to play with is the “What If You Had Invested” tool. It allows you to play “what if” scenarios with your portfolio. Of course, this doesn’t help your portfolio now; it’s just fun to play with. Other research tools include tools for screening ETFs and stocks, options trading tools, watch list, market movers, and more.
Education. The Capital One Investing education center is basic but effective. The main topics include beginning investment courses, types of investments, retirement, taxes, and investment advice.
Manage your taxes with GainsKeeper
Capital One Investing offers GainsKeeper to track your realized and unrealized gains and losses. GainsKeeper also tracks all your trades so you can maintain your investing records. The Gains & Losses tool allows you to export your tax related gain/loss data into a TXF formatted file, which can be easily imported into popular tax preparation software packages such as TurboTax and H&R Block Online. You can also export your gain/loss data into an Excel file or a text file, which can be imported into Quicken and some other money management apps.
Other features at Capital One Investing
Capital One Investing offers a full brokerage service with many additional features, including:
- Mobile apps. Capital One Investing offers customers the opportunity to trade and check their account balances via their smartphone or tablet.
- No fee IRAs and ESAs. Capital One Investing does not charge IRA custodial fees or fees for Educational Savings Accounts, or Coverdell ESA. This is a new feature as of November 1, 2008, and applies to all IRA accounts held at Capital One Investing. Many brokerages charge $20-30 per IRA account, which can add up quickly! This makes Capital One Investing an excellent place to open an IRA.
- No account minimums and no inactivity fees.
- Automatic investing at discounted rates.
- Access to mutual funds, ETFs, and options trading.
- Dividend Reinvestment Plans (DRIPs) and fractional share purchases.
- Free education and research section.
- Tax management software.
- Money Market Cash Account. Capital One Investing offers a money market account where you can store your cash when you don’t have it invested in any equities.
- Excellent customer service.
Capital One Investing Sign Up Bonuses
Capital One Investing frequently offers new customers a sign up bonus to open a new account. Offers are frequently changing, so I encourage you to visit our Capital One Investing promo page.
How Does Capital One Investing Compare to Similar Brokerages?
Capital One Investing compares favorable in many areas, including price per trade and investing tools. Their previous pricing model for automatic trades was once among the best in the industry, however, they have adapted to a lower price per trade model, which works out well for those who don’t want to set automatic monthly trades. It will be interesting to see how Capital One Investing changes after being acquired by E*TRADE – whether they will keep the current login and platform, or if everyone will migrate to the E*TRADE platform. If the latter situation occurs, then it is possible there may be changes to pricing and other features.
Capital One Investing Review – My Final Thoughts
Capital One Investing is a no frills, no non-sense brokerage built primarily for people who want to automatically invest into the same stock or fund. And at $4 per trade or less, Capital One Investing is a good vehicle to use for managing your investments. The no-load, no transaction fee Mutual Funds are another great benefit of using Capital One Investing for your investments, as is the ability to link your Capital One Investing account to your Capital One 360 account.
Capital One Investing is also good for people who invest via DRIPs because you can purchase and own partial shares through Capital One Investing. However, Capital One Investing is a less attractive option for people who like to make frequent real-time trades. It is not difficult to beat Capital One Investing’s $6.95 real-time trades – just look to Ally Invest at $4.95.
Brad Castro says
I agree with your review – I have my 3 year old’s account with Sharebuilder. This type of investment account is best suited for long term dividend growth/reinvesting strategies where you only plan to add to your positions over time.
One thing that should be noted is that although the commission on an individual purchase is only $4, if you ever plan to sell a position, you have to do that in real time which, as your table above shows is $9.95. That’s good because, as I recall, it used to be more ($15-$16).
Also, after ING acquired Sharebuilder, they expanded the brokerage service to include some basic option trades – the occasional prudent covered call might be appealing for investors in this kind of account.
Jon says
ShareBuilder has recently announced real time trades are now $6.95.
DDFD at DivorcedDadFrugalDad says
You nailed it in the close– Sharebuilder is an excellent long-term investing tool, but it is not for daytraders . . .
Miss M says
Yep, only good for long term investors. I have an account and I’ve never paid for a trade. Sometimes you can find promo codes for free trades and they have a sign up bonus for costco members (usually between $50 – $100). I like that it’s linked to my ING account, I can log in to my savings account and see my investment balance at the same time.
Dividend Growth Investor says
Is it true that Sharebuilder doesn’t charge you any annual fee on IRAs? If that’s the case I might open one next year with them. I hate paying a $30 annual fee to my stock broker ( I didn’t pay commissions up untill early 2009 though).
Ryan says
Hi DGI, Yep, no admin fees, but standard commissions still apply ($4 or less per automatic trade, or $9.95 for real time trades). Here is the ShareBuilder IRA fee schedule.
FFB says
I like my Sharebuilder account. I find the interface to set up a trade to be a bit confusing in timing the trade and turning it on (for the $4 trade option) but overall it satisfies my needs. Thanks to them I can say I own a teency tiny bit of Berkshire Hathoway (a fractional B share).
If you’re buying for the long term and don’t plan to sell often then this is a nice place to check out.
longtime sharebuilder user says
It is just sold to ETrade. And Etrade does not support fractional share
rmorris43 says
I had a bad experience where they took 14 minutes to process a transaction. I did not have a lot of shares, so the money factor was not a big deal. (It went up $3 a share in that time period) It was the customer service that bothered me. I am going to migrate my account when I find a company that will pay for the transfer.
Just thought I should share that. Thanks.
Ryan says
rmorris, I have had nothing but excellent experiences with TradeKing, which you can read about in this TradeKing Review. Individual trades are cheaper and there are more investing tools available at TradeKing. They also reimburse new customers up to $150 to transfer their funds to their company. TradeKing was rated #1 discount brokerage overall two years in a row by SmartMoney, a financial magazine from the Wall Street Journal. I encourage you to check them out.
MoniqueL says
I’m a novice and know nothing about investments, but I need to rollover my money from a previous employer’s 401K. (I don’t qualify for a Roth IRA). I already have an ING Savings account that I’m pleased with, and thought about investing my money with Sharebuilder. I need something low maintenance that will allow for long term investing. This article was most helpful. However the fine print on Sharebuilder’s website made me apprehensive:
“Securities products are: Not FDIC insured • Not Bank guaranteed • May lose value”
Should I be concerned that Sharebuilder is not FDIC insured, and are subject to investment risks, including possible loss of principal invested ?
Ryan says
Monique, Good catch on the fine print – it’s always good to read it!
FDIC insurance only applies to guaranteed accounts, usually things like savings accounts and CDs. Some government bonds are also guaranteed.
Stocks, mutual funds, ETFs, REITs, and similar investments carry a certain amount of risk; in other words, they aren’t guaranteed and can lose value. That doesn’t mean they are bad investments though, because with that higher risk also comes the potential for higher rewards than a standard savings account.
If you go back and look at your 401k, you will probably find similar language regarding risk and possible loss of value.
ShareBuilder is a fine institution and would be a good place to invest your retirement funds. Here are some more places to open an IRA; check out these resources because you may like one of these options better than ShareBuilder.
I also have tutorials for doing a 401k Plan Rollover into an IRA and 401k Rollover into a Vanguard IRA. Best of luck!
Tony says
Ryan…. great article. I am a beginner and want to first get started by finally opening up an account somewhere. I’ve been researching mutual funds and online stock brokers. Zecco, TradeKing, and Sharebuilder seem to always come up with positive reviews. Can I start a mutual fund with any of these companies? I would basically like a company where I could invest a small chunk of money at first and let it sit there. And at the same time, continue to learn more about stocks and investing and possibly add more and build-up a portfolio. Also, I’ve been looking into the mutual funds, FAIRHOLM (fairx), and T. Rowe Price Equity Income (prfdx). After a bit of research, I realized that some mutual funds need a start-up of $2500.00 and others $10,000.00. Something I’ll definitely have to think about.
Note: I do have an ING savings account, but I’m thinking of switching to American Express high yield savings.
Thanks
Ryan says
Hi Tony, all of these are good options to start a brokerage account and all of them offer various mutual funds and ETFs. In my opinion, TradeKing offers the best tutorials and information for investors of all types – beginners through advanced. Their prices for individual trades are and other features make them the most attractive option in my eyes. Some of the large brokerage houses have larger opening balance requirements, which is something to consider.
American Express high yield savings is a good option. I also recommend checking out Discover Bank and some other online savings accounts to see which one best meets your needs.
Best of luck!
Mick says
Thanks for the great review. I have been considering choosing an online trading company, and ShareBuilder looks like a good fit for me. I have a question regarding the automatic investing option. Could one automatically invest once a month for 3 months, then not invest at all? I see there are no inactivity fees.
Thanks again!
Ryan says
Mick, yes, you can start and stop automatic investments at any time. There are no requirements to continue.
Kate says
Ryan, I hope this isn’t a really dumb question, but here goes. Is the $4 that you pay for an automatic investment the same thing as the transaction fee? In other words, if I open a Roth IRA for my kid who just graduated from college, and the whole thing is in one of the free ING funds, will there be a fee if she buys more of that same fund after my initial investment? I want to make it as cheap as possible for her to contribute to the account.
Ryan says
Kate, yes, the $4 is a transaction fee, which applies to most stocks, ETFs and similar investments. However, the free ING Fund are free to purchase and there are no recurring transaction fees for those funds. That said, there is probably a fee associated with the fund, but there is no way around that (those are fund management fees, which are usually very low for index funds and they are found on virtually all index funds and mutual funds).
Erinn says
I am 18 years old and researching stock investments. I had a finance teacher I really trust who does a lot through ING. I think this is the best option for me. At the moment I have around 1500 to invest but I can easily put in around $100 a month. Say I open an account in Sharebuilder, just an individual account. What happens next?
Ryan says
Erinn, your next step would be to determine the time frame/goal of your investment. For example, if you want to invest for retirement, you should consider an IRA (read this article on deciding which IRA is best for young investors: Traditional IRA or Roth IRA for Young Investors?). If this investment will potentially be used in a shorter time frame, for example, 5-10 years, then consider a taxable investment. Then research which stock, fund, or other investment you wish to contribute to, and initiate the investment.
Dan says
Hi,
Is there a fee for the DRIP program with Sharebuilder? For example, if I owned 50 shares of a company and received .3 additional shares during a dividend payment, would that amount automatically be applied to my total holdings at no cost, giving me 50.3 shares? Or is there a charge to reinvest the dividend into more fractional shares?
Thanks,
Ryan says
Hi Dan, yes, ShareBuilder offers free Dividend Reinvestments.
Once logged in, go to Accounts > Portfolio > Dividend Reinvestment. Click Edit next to a security to make changes to its reinvestment settings. There is no charge and they will track when the shares were purchased (for tax reasons).
Toni says
I’ve read that government issue bonds aren’t a very valuable investment. My grandchild is 2 years old and I’d like to do something for her future. I had originally planned to buy EE savings bonds. I know absolutely nothing about investing. What’s a good way to start?
Thanks!
Ryan says
Hi Toni, Government bonds are an extremely low risk investment, but they don’t typically bring in high returns. You can read more about savings bonds here: A Primer on US Savings Bonds. Additionally, we have an article you might find helpful: Best Investment Strategies For Beginners.
You didn’t state your desired investment goals for your grandchild, but you may wish to consider a 529 College Savings Plan, which is a great way to save for your grandchild’s college.
I recommend keeping it as simple as possible when you start – the less complicated your investments, the better. For now, it would be a good idea to read as much as you can about the basics of investing so you understand how and where your money is invested. Additionally, you want to make sure that you are investing enough for yourself and your future before investing for someone else. Your grandchild has a much longer time frame to invest, you will need the money much sooner.
Best of luck!
Lina says
I invested with mutual fund NTF…( no transaction fee..) this is good for busy people…no time to real time..lol
mark says
I funded my account electronically on November 6. I cannot place a trade because Sharebuilder has frozen the account until November 17. That time frame is totally unacceptable. Their customer service associates also presented themselves like stumbling idiots. I regret my decision to use Sharebuilder and recommend everyone avoid them.
longtime sharebuilder user says
The custom service is currently provided by Capital One. They are not very good. They were wonderful when under ING.
Peter mwangi says
I have had sharebuilder for three years now and all i have seen is positive growth in my money. I give them a five star.
longtime sharebuilder user says
Absolutely agree. This is a poor man’s way to invest earlier and save for retirement.
Britton Harvey says
Can a Canadian Citizen living as a legal permanent resident in the U.S. open an account with share builder?
longtime sharebuilder user says
Yes, you can
longtime sharebuilder user says
CapitalOne just sold Sharebuilder to ETrade and may not offer automatic investment option, i.e. the best feature of sharebuilder for not a millionaire is not available any more. Called ETrade. No answers. Hope someone can find out what is going on and how to stop this.
Stuart Walters says
Hi Ryan –
Thanks for the posts. I’ve had a Sharebuilder/Capital One Investing account for several years now. I have an automatic payroll deposit into the account, which then triggers an auto purchase of the fractional shares that I’ve selected to build a portfolio on. I’ve been really happy with the structure, fees, and performance, but this change to Etrade concerns me. I haven’t been able to determine if 1) Etrade will continue allowing fractional share purchases and 2) if auto-investment rules will be able to trigger purchases.
I’ve enjoyed having a “set it and forget it approach to buying stocks, and don’t want to actively manage it several times a month.
If you find out more about this, can you let us know? If Etrade is not going to support the most liked features, then can you share your recommendations for services that will support those options?
Ryan Guina says
Hi Stuart, I’ll try to keep this updated. I’m not sure if Capital One Investing will completely roll into the E*TRADE brand and move all their customers to the E*TRADE pricing and features, or if any of the Capital One pricing or features will transfer over. I’ll update this article when I learn more. Thanks!
Bernie Mac says
I’ve been sold on Sharebuilder since I read about them in Kiplinger’s in early 1999, I’ve never had a reason to even consider moving anywhere else.
The fact the ETrade doesn’t have basic answers how they will handle the vast majority of us that are part of the Automatic Investing Crowd quite frankly concerns me.
When I followed up with CapitalOne, the answer was ALL of us were going to ETrade. Quite honestly, I can live with a different fee structure, but I really like (and have had a lot of success over the years) with my set it & forget it approach…Pick my stocks and watch them grow.
My biggest error over the years was forgetting to write the auto debit in the Check Ledger a few times.
Nadine says
I just found out that Capital one investing will no longer automatically invest dividends which sucks. Are there any other online trading companies that do this?