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4.10% Reward Checking Account at an Illinois Bank (Crossroads)

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Crossroads Bank
Update 6/07/09: The top yield has fallen to 4.10% APY. Refer to the bottom of the post for the rate history.

Crossroads Bank has a reward checking account called Effingham First Checking that pays 4.10% APY on balances up to $30,000 (2.00% for above) if the following two monthly requirements are met: 1) 20 Visa debit card transactions, and 2) receive electronic statements. If these are not met, the rate falls to 0.10%. The minimum deposit to open the account is $50.

The rate and the $30K balance cap are a little higher than the average reward checking account, but you have to work for this with the 20 debit card transaction requirement. Most other reward checking accounts only require 10.

The bank appears to require a branch visit to open accounts. Branches are located in Effingham, IL. The bank has been FDIC insured since 1974 (Certificate # 21486).

Other High Yield Reward Checking Accounts

For other reward checking accounts and for more information on these accounts, please refer to the following posts:


Rate History:
06/01/09: 4.10% APY for up to $30K
01/14/09: 5.25% APY for up to $30K
01/05/09: 5.75% APY for up to $30K
03/27/08: 6.10% APY for up to $30K; 2.00% for above; 0.10% if req's are not met

  Tags: Crossroads Bank, Illinois, checking account, reward checking account

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Comments
17 Comments.
Comment #1 by Anonymous posted on
Anonymous
20 Visa debit transactions is a new one. Granted the limit is a bit higher but cant we just open two a/c elsewhere requiring 10 transactions. Of course, the number of "nationally available" rewards checking a/c is fairly limited.

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Comment #2 by Lorimar (anonymous) posted on
Lorimar
Perhaps the fact that this bank is requiring 20 debit card transactions reinforces the theory posted earlier that the banks are not making as much on these rewards checking accounts as promised by the company in Texas that created this type of account.

Perhaps too many people are doing the 10 small transactions trick, such as buying 10 iTunes songs or sending 10 $1.00 payments via PayPal, etc., to get the debit card transactions out of the way.

It will really be interesting to see if these rewards checking accounts will still be around in a few years. Will this whole thing be a failure? Will banks realize they are losing money on the deal? Will these types of accounts turn out not be as popular as promised?

Stay tuned.

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Comment #3 by Anonymous posted on
Anonymous
People who put a lot of money in these accounts need to calculate the cost of messing up. That's what the banks are counting on.

If you put $100,000 in this account and **** up on month (and you could have made 3.5% in a normal banking account) you just lost $300 in interest.

I think this accounts are way too much trouble than they are worth. - sfchris

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Comment #4 by Texas Tea (anonymous) posted on
Texas Tea
Dear SFChris,

While your point might apply to a rewards account that has a $100,000 balance cap, it doesn't apply to this Crossroads Bank in particular, as this bank has a $30,000 balance cap.

Additionally, though, if one has $100,000, which is a lot of money, it is highly unlikely that that person would **** up. Someone with $100,000 cash in the bank is the type of person who will make sure they do their required transactions immediately.

And finally, most debit transactions requirements for these rewards accounts is only 10 per month. Considering you could buy 10 iTunes songs in 5 minutes or less, how can you say this is "too much work"? It actually couldn't be more simple...done from the convenience of home.

Your posting is so off base. Sorry.

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Comment #5 by Anonymous posted on
Anonymous
Texas, not as off base as you might think. Other forums have postings about people freaking out because their small transactions were ignored by the bank and they are scared they will miss the deadline. And people with money typically have less time on their hands to pay attention to detail.

As to your other point, I did not notice that the limit was 30k.. but many people who have one of these types of accounts have additional ones as well.

My point is that the bank figures that a certain percentage of people will **** up.. people do and it is extremely costly.

Just be sure to do the math and remember that there are many life events that can take your ey off the ball. Just not worth the hassle. sfchris

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Comment #6 by Anonymous posted on
Anonymous
How can a small transaction be ignored by a bank? Sounds like somebody is BS'in a little... ;o)

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Comment #7 by Anonymous posted on
Anonymous
I have to agree with sfcris.
They were my thoughts on Reward Accounts also.

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Comment #8 by Anonymous posted on
Anonymous
"How can a small transaction be ignored by a bank?"

Just the recently I read where one bank required a minimum of $25 per transaction to count towards their Reward Acct.

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Comment #9 by Anonymous posted on
Anonymous
Can't remember what bank it was, but their 1 cent payments were being ignored by the "receiving party" not the bank... I guess the reason for this is it cost more in fees for them to receive 1 cent then not so they opted not to accept the payment.

Bottom line is it is a major headache with a penalty of up to $300 per month that you **** up.

Some people have a lot of time on their hands and tolerence to risk $300 per month, but not me. sfchris

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Comment #10 by Texas Tea (anonymous) posted on
Texas Tea
I have a rewards account, so I know exactly how it works.

They all have online access to your account, and inside the online access is a place you can go to see if you have met your monthly requirements. So, there is no room for error.

With my bank, my month starts on the 1st and ends on the 30th or 31st. (Unless it is Feb., of course.)

So, starting on the 1st, I can go to PayPal and send 10 separate small payments to my alternate PayPal account or to a friend or family member. (I do $1.01, $1.02, $1.03, etc., just to make it easy for me to keep track.) I could also buy 10 iTunes songs at 99 cents each.)

I then can log into my account and make sure these small payments have posted and the online banking site will post in green letters that I have made my debit card transactions.

Couldn't be easier.

Not really a lot of work. I can do the 10 PayPal transactions in 10 minutes (I am online every day anyway), and I can check my online account at anytime, which I do regularly.

It really is no big deal.

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Comment #11 by Anonymous posted on
Anonymous
I have to agree with Texas Tea. These reward accounts make it very easy to satisfy the requirements. Just do separate "orders" at your local food store, or self service check out @ Walmart. I can easily meet the 10,15,20 credit purchases in five days or less. Then, log on, check credit purchases. BINGO, done for the month. 1 ACH debit or DD, no problem with GMAC or etrade doing a pull. Easy, easy.

1
Comment #12 by Anonymous posted on
Anonymous
I have a reward checking account, and I meet the requirements in good faith. I use my debit card to purchase ten legitimate lunches per month at my company cafeteria - about 8 bucks a piece. I don't try to fool the bank with 1 cent transactions or paypals to myself. As a reward, I currently get 6.01% APY. As long as the bank is offering a reward, I'll fill the requirements in good manner. If the bank one day decides that this is not profitable for them, I'll move on to something else. I'll leave this up to them. In todays environment, you can't get a better deal.

1
Comment #13 by Anonymous posted on
Anonymous
Are we out smarting the banks or ourselves with these one cent or one dollar transactions? I do not know the in and outs of banking but I do know they are in business to make money and there is no way they make money off of these transactions. I'm sure the banks didn't start these accounts just to keep us saver's happy. I am retired and live alone and I don't have a problem using the card to make 10 normal purchases. I am guessing the banks will soon put a minimum amount on each transaction or discontinue the accounts all togather. When they do, the people making these small purchases will be the first to ****. Remember, they usually don't guarantee the interest rate so all they have to do is cut the rate to 1 or 2 % and they won't have to shut them down as we will do that ourselves. So I repeat my question, are we outsmarting the banks or ourselves?

1
Comment #14 by Cooper (anonymous) posted on
Cooper
I think you a completely wrong to refer to it as "outsmarting."

I don't feel I or anyone who does the 10 $1.00 transactions thinks we are outsmarting anyone.

I do it because it is a matter of convenience, and because I am not a fan of debit cards in general.

I hate the fact that with a debit card, unlike a regular credit card, the money is taken out immediately. So, one is hurt a lot more should fraud ever be perpetrated.

I never used a debit card in my life.

I was forced to use one now because of the reward checking requirements.

I don't want to use my debit card a lot for fear the number will get out there, which will put me more at risk for fraud.

Yes, the bank would refund my money if I was a victim of fraud, but I'd have to go chasing after my money.

So, I do the 10 PayPal transaction s trick only and then my card stays safely at home.

Again, I don't think I am outsmarting my bank. And I know the banks might change the rules if enough people do as I do.

But I also feel the banks will change the rules anyway because even if people use their debit cards normally, these reward checking accounts will still prove nowhere near as profitable as the banks were led to believe by the Texas company that sold them on this.

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Comment #15 by Anonymous posted on
Anonymous
Banks and CU's put out these great products to reward customer loyalty. It is people like a few folks here that **** it up for the rest of us. Small transactions COST to financial institution money. So as these little weasels (with 5 cent transactions) grow in numbers, those of us that use the account properly will be punished by reduced yields.

It's a shame. People like this are the reason we all have to read 10 miles of fine print on accounts we open...since banks have to close every manipulative loophole that they find.

1
Comment #16 by Anonymous posted on
Anonymous
New rates as of 1/5/09 are: 5.75% APY up to $30K; 2.00% APY over $30K, and 0.10% if requirements not met.

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Comment #17 by Anonymous posted on
Anonymous
Top yield has fallen to 5.25% APY.

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