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Frost Bank's Online Checking Account

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Frost Bank

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).

Rate History:

  • 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)

  Tags: Texas, checking account, Frost Bank

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Comments
4 Comments.
Comment #1 by Anonymous posted on
Anonymous
Apparently Frost has raised the base rate up to 3.24% APY.

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Comment #2 by Anonymous posted on
Anonymous
Now their rate is down to 2.76%.

Am I the only one that is bothered by no paper checks? I rarely use them, but there are one or two situations per quarter where I must write a paper check.

1
Comment #3 by Anonymous posted on
Anonymous
Frost lowered the rate again!

Received this email April 7th.

"As your financial partner, we appreciate the trust you have placed in us by using the Frost Momentum account. Since we value your business, we are letting you know about a rate change to your account.

Your Frost Momentum account is now earning an annual percentage yield of 1.77%* or up to 2.03% APY** when you use your debit card for everyday spending. This adjustment was necessary because, over the past year, the Federal Reserve has cut interest rates by 2%, to nearly zero.

Our commitment to providing you with a highly competitive rate continues to be a priority at Frost. Even with this change, you are still earning one of the highest rates in the country for online accounts and a rate higher than most bank CD rates.

Not only are you getting a great rate, but also the proven stability and safety of Frost.

In times like this, you can rely on Frost to help you navigate the changing financial environment. If you have any questions about your account or need help with your investment strategy, please contact your Frost banker, call us at 1-877-283-7678 or e-mail us at webhelp@frostbank.com."

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Comment #4 by Banking Guy (anonymous) posted on
Banking Guy
Thanks. Sorry to see the rate cut. I've updated the rate history in the post.

1