My first ever stock market transaction was through the Capital One Investing platform. I had no idea what I was doing, but I still managed to buy seven individual stocks before I ran out of money.
Why did I choose Capital One? Because it was easy to navigate, I could instantly fund an account with money from my checking account, and I could look up ticker symbols easily. It was the only platform where I felt confident that I wasn’t getting scammed.
I’ve changed as an investor. I’m far more knowledgeable about investing strategies and investing platforms. I still have an investment account at Capital One, but I’m no longer such a fan. Capital One Investing does a lot of things well, but it is far from perfect.
Note: In January 2018, Capital One announced that it was selling all its investing business to E*Trade. As a result, all Capital One investing customers transitioned to E*Trade in mid-2018. Check out our full E*TRADE review here to see how E*Trade compares.
Capital One Investing Fee Structure
One reason I love Capital One is their clear fee structure. All stocks, ETFs, Mutual Funds and Options cost $6.95 per trade (buy or sell). Options cost another $.75 per contract.
Recently, Capital One Investing introduced their “PortfolioBuilder” tool. The tool creates a recommended basket of up to 8 low-cost, broadly diversified ETFs based on your investment goals, your time horizon and your risk tolerance. You can buy all 8 ETFs in the recommended proportions for a single cost of $18.95- which is about a 50% savings based off of their existing fee structures.
An even more compelling offering is the ShareBuilder investing plan pricing. With this tool, you can create an automatic deposit and investment schedule. You can decide whether to invest every week, or once a month. When you enroll in the Sharebuilder plan, you can place buy trades on Tuesdays only for $3.95 per security. Changes to your investment plan need be made by 5:00PM on Monday to be effective for the following day.
Despite the clear fee structures, Capital One’s fees are somewhat higher than the broader marketplace for discount brokerage firms. For example, Ally Invest offer $4.95 trades, and major brokerages like Fidelity and Charles Schwab both offer no-fee mutual funds and ETFs.
Portfolio Analysis Tools
Capital One recently revamped their portfolio analysis tools. You can easily see your asset allocation, your sector allocation and even your true global allocation. It’s great that Capital One gives you insights into your portfolio allocation. They even offer beautiful images.
However, Capital One falls short in one key area. You cannot easily measure your annualized portfolio performance, and it’s difficult to compare your portfolio’s performance to a benchmark. If you end up with an investment at Capital One, then you should consider using a tool like Personal Capital or DIY.Fund to track your performance over time.
Research Tools
Compared to other brokerages, Capital One Investing has run of the mill research tools. Capital One’s focus is clearly on the beginning investor. Their fund analysis tool gives all the necessary information, and nothing more. They focus on the type of fund, the five year returns, and the current expense ratio.
They also link out to the prospectus and other commentary (other commentary is mainly for stocks rather than ETFs and Mutual Funds).
On top of the Research tools, Capital One has a top-notch education platform. They create filters for their articles based on topic or investment experience level. While the articles aren’t comprehensive, they give investors a place to start researching.
Usability
As I mentioned in my intro, Capital One Investing is user friendly, especially for beginners. Too many brokerages make placing a trade confusing. Not Capital One. They make it easy to buy and sell one position or multiple. I’m especially impressed by the automated nature of the ShareBuilder Plan.
On top of the usability within the platform, Capital One Investing makes it easy to open new accounts, and fund them from Capital One 360 (or other bank) accounts. Transfers from Capital One 360 are instantaneous.
Final Thoughts On Capital One Investing
When I first started investing through Capital One, they were the clear winners for beginning investors. These days, I’m not so sure that’s the case. Fidelity, Charles Schwab, and Vanguard all offer no-load ETFs (and mutual funds). Robinhood makes it easy to buy and sell stocks for free. M1 Finance makes it easy to manage a portfolio that contains both individual stocks and funds. Plenty of companies offer better research and portfolio analysis tools.
Still, Capital One has a few things going for it. The Sharebuilder Plan is a really great option for people who struggle to stay disciplined with their investing. The instantaneous movement of cash from Capital One 360 accounts to Capital One Investing accounts makes it easy for current customers to start investing today.
Seven years ago, Capital One Investing made it easy for me to start investing, and I believe they still offer that intangible comfort today. I certainly cannot recommend Capital One on the basis of their fee structure or their portfolio analysis tools. However, if you’re struggling to get started with investing, Capital One Investing might be the right option for you.
Have you tried Capital One Investing?
Capital One Investing
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Commission & Fees - 80
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Customer Service - 80
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Ease of Use - 80
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Tools & Resources - 80
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Investment Options - 90
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Specialty Services - 70
Overall
Summary
Capital One Investing is a prominent & user-friendly platform. In this in-depth review, we’ll explain the pros and cons of using it to invest, and what the different options are.
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.
