Update 9/14/10: The top yield has fallen to 2.75% APY. Please see bottom of the post for the rate history.
City Bank is offering a reward checking account that pays 2.75% APY on all balances and refunds ATM fees if the following monthly requirements are met:
- 20 debit card purchases
- 4 ACH debits or credits
- one online bill payment
- access your online account
- receive electronic statements
If this is too much work, the bank has a secondary level with a yield of 1.00% APY if only the following monthly requirements are met:
- 8 debit card purchases
- one ACH debit or credit
- access your online account
If neither of the above requirements are met, the rate falls to 0.16%. The minimum initial deposit is $50. There are no minimum balance requirements. Free checks are provided for life of the account.
This account appears to be available only for Texas residents. You can open this account online either at the bank's website ("apply now" button on the reward checking webpage) or at CheckingFinder.com.
$50 Signup Bonus (appears to have expired)
One advantage of using the bank's website to apply is that there appears to be a $50 bonus for new customers. In the application, it states the following:
If you are a NEW City Bank customer, you are entitled to a $50 signing bonus.
New City Bank Customers Only. Minimum account opening deposit of $50.00 required to receive cash bonus. Cash bonus will be given at account opening but is not considered part of opening deposit. Cash bonus is considered interest and subject to 1099 reporting.
Update 3/10/09: The bank also offers a savings account called Reward Plus that links to the reward checking account. As long as you qualify for the Reward Checking interest rate, your Reward Plus Account will earn that rate as well, with no additional qualifications.
Branches are located in several Texas cities including Lubbock, Dallas, El Paso and Plano. The bank has been FDIC insured since 1984 (FDIC Certificate # 25103).
Other High Yield Reward Checking Accounts
Even though the interest rate of City Bank's reward checking account is lower than the average and it requires many more debit card purchases, the lack of a balance cap may make it worthwhile for some. There are no reward checking accounts that I'm aware of that have yields of 5% or higher and with no balance caps. State Bank of Toledo and First Arkansas Bank & Trust used to offer 6%+ APY without a balance cap, but these have ended, and now both pay under 5% up to a balance cap.
There are some banks and credit unions that have $50K balance caps. The best one with national availability is at Coastal Federal Credit Union which offers a 5.01% APY (see post).
To find reward checking accounts in other areas of the nation or to learn more about these accounts, please refer to my High Yield Checking website.
- 05/10/10: 2.75% APY for all requirements, 1.00% APY for secondary level of requirements
- 10/21/08: 3.56% APY for all requirements, 1.51% APY for secondary level of requirements
- 06/20/08: 4.07% APY for all requirements, 2.02% APY for secondary level of requirements