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Capital One Investing Account Review: Brokerage Fees, IRA Investing, Pros and Cons, Mutual Fund Offerings

Capital One Investment Account Review - Pricing

  • Stocks/ETFs: $6.95 per trade
  • Options: $6.95 + $0.75 per contract
  • Mutual funds: $19.95
  • Stock/ETF/Mutual fund Automatic Investments: $3.95 per investment

Capital One Investing Important Fees and Surcharges

  • Extended hours surcharge: extended hours trading is not available
  • Large order surcharge: $0
  • Penny stocks surcharge: $0.007 per share
  • IRA setup fee: $0
  • Annual IRA fee: $0
  • Maintenance fee: $0
  • Inactivity fee: $0

Capital One Investing Advantages

  • Very low Automatic Investing Plans costs
  • Free dividend and capital gains reinvestment
  • No account minimums
  • No account inactivity or maintenance fees
  • No setup or annual fees on IRA and ESA accounts
  • $0 to open an account

Capital One Investing Disadvantages

  • Advanced trading tools are not offered
  • Extended hours trading is not offered
  • Few investment products
  • Shorting equities is not offered
  • Automatic investments could only by made on Tuesdays

Capital One Investing Account Types

  • General Investing
  • Individual Account
  • Joint Account

  • IRAs
  • Traditional IRA
  • Rollover IRA
  • Roth or Conversion IRA

Automatic Investment Plan

Capital One Investing, formerly known as ShareBuilder, is an online brokerage company operated by the U.S. banking giant Capital One. It may be deemed wimpy by those who have accounts at OptionsXpress (review), or ThinkOrSwim (review), but the firm holds its own to the more systematic and methodical investor. The brokerage’s claim to fame is its low cost automatic stock purchase plan - this is the real benefit of a company's account.

A Capital One Investing client can program his brokerage account to automatically buy a predetermined dollar amount of a stock or ETF on a weekly basis. The idea is simple: as long as there is enough free cash in the account on a Monday afternoon, the firm will make a Buy order of one or more stocks or ETFs on Tuesday.

Since the dollar amount of each purchase is pre-set, the number of shares of the equity or ETF purchased will be unknown until after the Buy order is made. The really interesting thing about Capital One Investing’s automatic stock purchase plan is that the account is set to make fractional share purchases. In other words, if a client has his automatic stock purchase set to buy $30 of iShares Silver Trust (SLV – NYSE) and $50 of SPDR Gold Trust (GLD – NYSE) each time, Capital One Investing’s systems will allow a fractional purchase of SLV and GLD. In this case the client might buy 1.09 shares of SLV if the share price of SLV is $27.50, while on the next weekly buy in he might buy only .95 shares of GLD if the price of SLV is $31.57 that day. The same is true for a higher priced stock or ETF such as GLD. In this case the client might buy only 0.3 shares of GLD if the price of GLD were to be $166.65/share. At the same time the client might buy 0.285 shares of GLD if the price of GLD moved to $175.46 per share the next week.

Capital One Investing will charge the client $3.95 for each standing Automatic Purchase that it executes. This charge is subtracted from the amount of the standing order, which can lead the first time user to some very confusing and disappointing buy ins. If the client that wishes to buy into SLV at $30 per week will actually have to list his dollar value buy in amount at $33.95. The trading platform will then take the $33.95, subtract the transaction fee of $3.95, and invest the remaining $30 into a fractional share of SLV.

Capital One Investing Review

Real time orders to invest in stocks and ETFs cost the client $6.95, which is a bit expensive for a bare bones trading platform. If a client wants to buy/sell securities real time, it would be best to open an account at a broker such as Optionshouse (review) or ally-invest (review) - companies well-known for their deep discount prices.

Capital One Investing does not have minimum balance requirements, account inactivity or maintenance fees (this includes all retirement investment accounts). Minimum to open cash account is $0; for margin account it's $2,000. Mutual fund transactions cost $19.95. In addition to traditional brokerage accounts, Capital One Investing also offers IRAs, Educational Savings Accounts and Custodial Accounts. The firm is a member of the FINRA and SIPC which means that client accounts are insured in case of brokerage failure for up to $500,000.

Capital One Investing Review

Capital One Investing clients can download apps that give them on-demand look at the current status of their portfolio, lets them execute trades, and deposit funds. The apps are available for iOS, Android and BlackBerry devices.

Capital One Investing Review

Customer Service

Capital One Investing's customer service department is available Monday through Friday from 8:00 AM to 11:00 PM EST. If a client ever has any questions, he or she may reach an agent by phone at 1-800-747-2537. Alternatively, they can use the live chat feature located on the website's Contact Us tab.

Capital One Investment Account Review Summary

For anyone looking to invest money automatically, or only wanting to invest in a simple mix of mutual funds, ETFs and stocks, Capital One Investing is a good company to open an account. For a more advanced or active investors there is a bunch of better options to consider.

Capital One Investing Promotion Offer

Capital One Investing Reviewed by on . Rating: 3
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