Update 3/07/09: The top yield has fallen to 3.01% APY. Refer to the bottom of the post for the rate history.
Sacramento Credit Union has started a Rewards Checking Account that pays 3.01% APY for balances up to $25,000 (1.01% for above) and free automatic ATM fee refunds (up to $4.99 per transaction and up to $25 per statement cycle) if the following monthly requirements are met: 1) 12 check card purchases, 2) direct deposit or auto payment, and 3) view account statements online. If you don't meet these requirements, the interest rate falls to 0.10% and there are no ATM fee refunds. There is no monthly service charge or minimum balance requirements regardless if the requirements are met.
The 12 debit card transactions a month is little more than the typical 10 that others require. I like how the credit union specifically mentions that the purchases can be for any amount. I haven't come across one of these reward checking accounts that has a minimum dollar amount on the debit card transactions. So those who have cash back credit cards can continue using them on their high dollar purchases and just use this debit card for the small purchases.
Field of membership includes all persons who live or regularly work in El Dorado, Placer, Sacramento, Solano, Sutter, Yolo and Yuba Counties, California. See the credit union's eligibility page for the full details. Membership requires a $5 one-time membership fee and a minimum deposit of $25 in a savings account.
Branches are located in Sacramento, Elk Grove and Fair Oaks. The credit union is federally insured by the NCUA (Charter # 62641). It has $321.8 million in assets and 28,175 members.
Thanks to Craig who mentioned this new reward checking account in the comments of the finding deals post.
For other reward checking accounts in other parts of the country (and some without balance caps), please see my reward checking account page and my best checking account post.
3/04/09: 3.01% APY
2/04/09: 3.51% APY
1/01/09: 3.76% APY
9/28/08: 4.26% APY
4/18/08: 4.51% APY
3/31/08: 5.01% APY
7/09/07: 6.01% APY