Update 11/22/09: The top rate has fallen to 1.50% APY.
Central Pacific Bank has a reward checking account called Free Plus Checking that pays 1.50% APY on balances up to $25,000 (0.05% for above) and refunds ATM fees (up to $3/transaction and $20/month) if the following monthly requirements are met: 1) 15 Visa Check Card purchases, 2) Direct deposit, and 3) Check Safekeeping service (e-statements when available). If these are not met, the rate falls to 0.05%. The minimum opening deposit is $50. There are no minimum balance requirements or monthly service fees.
Most of the branches are located on Oahu, but there are a few branches on each of the other major Hawaiian islands. The bank has been FDIC insured since 1954 (FDIC Certificate # 17308). It has $5.7 billion in assets, which makes this one of the largest institutions offering a reward checking account.
For other high yield reward checking accounts and to learn more about these accounts, please refer to my High Yield Checking website.
11/18/09: 1.50% APY up to $25K
10/15/09: 2.00% APY up to $25K
06/01/09: 3.00% APY up to $25K
03/01/09: 3.50% APY up to $25K
04/15/08: 4.00% APY up to $25K
Edit 1/7/09: Reward checking now called Free Plus Checking.
Edit 2/10/09: Updated requirements