Frost Bank's Online Checking Account
Update 10/21/2010: Rates have fallen. Refer to the bottom of the post for the rate history.
Frost Bank has started a new online checking account called Momentum Checking. It has a yield of 2.80% APY for balances between $15,000 to $150,000. There's a 3-month intro rate of 2.76% for balances under $15,000. Afterwards the rate falls to 0.01%. There are no monthly service charges. The minimum deposit is $1.
Debit card usage can increase the rate, but not by much. An additional 0.05% will be paid for every 10 debit card purchases per month. The maximum bonus rate is 0.25% for 50 debit card purchases per month.
It's designed to be an online account like ING Direct's Electric Orange. There are no paper checks. If you want paper checks, you can open Frost's free checking account. Online bill pay is free. There are also online budgeting and tracking tools.
There's an online application, and it's open to people in any state. There are no refunds of ATM fees, so you'll want to stick with Frost ATMs.
This online checking account appears to be Frost Bank's answer to reward checking accounts and online checking accounts. The yield isn't too bad for checking accounts that don't have debit card usage requirements. However, the bonus rate for debit card usage should be a lot higher. An extra 0.25% for 50 debit card purchases per month is way too low.
Frost Bank has over 100 branches located throughout Texas. It has been FDIC insured since 1934 (FDIC Certificate # 5510).
- 10/21/10: 0.01% under $15K (0.80% for 1st 3mo); 0.80% APY $15K-$150K (1.06% w/50 debits)
- 04/07/09: 0.01% under $15K (1.76% for 1st 3mo); 1.77% APY $15K-$150K (2.03% w/50 debits)
- 02/26/09: 0.01% under $15K (2.76% for 1st 3mo); 2.80% APY $15K-$150K (3.05% w/50 debits)
- 01/21/09: 0.01% under $15K (3.19% for 1st 3mo); 3.24% APY $15K-$150K (3.50% w/50 debits)
- 08/10/08: 0.05% under $15K (2.97% for 1st 3mo); 3.00% APY $15K-$150K (3.25% w/50 debits)