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 $1 each.
Real-time trades and options trades cost the same regardless if whichCapital One Investing plan you choose. Capital One Investing also offers free trades for a wide variety of ING owned mutual funds.
Here is a quick breakdown of Capital One Investing plan options and pricing. For more pricing information, visit the Capital One Investing home page.
|Capital One Investing Price Plan||Basic||Advantage|
Included with Program
20 per month
+$.75 per contract
+$.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.