Update 2/26/10: The top yield has fallen to 2.50% APY. Refer to the bottom of the post for the rate history.
Southbridge Savings Bank has started a reward checking account it calls Key Rewards Checking. It pays 2.50% APY on balances up to $50K (1.00% for over) and offers refunds of all ATM fees if the typical reward checking requirements are met: 1) 10 debit card POS transactions per statement period, 2) automatic withdrawal/deposit or electronic payment, and 3) receiving statements electronically. If these requirements are not met, the rate falls to 0.10%. Minimum deposit to open the account is $25. There are no balance requirements or monthly fees regardless of meeting the above conditions. Online bill pay is free.
It appears likely to require a branch visit to open this reward checking account. Branches are located in Massachusetts cities of Southbridge, Charlton, Holden, Sturbridge and Worcester. They also have branches in Big Y Supermarkets in several other cities. The bank is FDIC insured (FDIC Certificate # 23524).
Other Reward Checking Accounts
For other reward checking accounts in other parts of the country, please see my reward checking account page. I also list a few reward checking accounts without geographical restrictions in my best checking account post.
02/26/10: 2.50% APY up to $50K
08/25/09: 2.75% APY up to $50K
07/24/09: 3.00% APY up to $50K
01/22/09: 3.25% APY up to $50K; 1.00% APY over $50K; 0.10% if requirements are not met
12/24/08: 3.75% APY up to $50K; 1.50% APY over $50K; 0.25% if requirements are not met
07/15/08: 4.00% APY up to $50K
03/31/08: 4.25% APY up to $50K
07/20/07: 6.01% APY up to $50K; 2.01% APY over $50K; 0.51% if requirements are not met