Rate Cuts at Redneck Bank and Its Sister Banks

It's yet another unfortunate example of high-yield accounts becoming overloaded with deposits. Redneck Bank and its two sister banks (AmericaNet and Evantage) sent out emails today informing their customers of rate cuts scheduled to take effect on 5/05/2009. These banks had been offering leading rates for both their reward checking accounts and online savings accounts.

Here's a copy of the email sent to Evantage customers. I've seen readers post similar emails for AmericaNet and Redneck Bank.

Dear Customer:

Thank you very much for choosing Evantage Bank as your financial institution. During the last few months, we've experienced a tremendous growth of new customers opening Rewards Checking and Mega Money Market Accounts. Due to this high demand, we subsequently must change the rates of our Rewards Checking and Mega Money Market Accounts, effective May 5, 2009. The new rates are as follows:

Rewards Checking

4.00% APY* on daily balances less than or equal to $10,000.00**
1.00% APY* on daily balances greater than $10,000.00**
Rewards Checking accounts limited to two per Social Security number.

Mega Money Market

2.00% APY* on daily balances less than or equal to $35,000.00
1.00% APY* on daily balances greater than $35,000
Mega Money Market accounts limited to one per Social Security number.

Important: Please note that since the rates are changing in the middle of the monthly statement cycle, your next statement will reflect a blended interest rate combining the higher rate during the first part of the statement cycle and the lower rate during the last part of the statement cycle.

It was only in March that these banks put in place new tiers which limited the balances that qualified for the top rates. I was hoping that showed they intended to keep these rates for a while. Here's a timeline for the changes in these accounts over the last couple of months:

• 5/05/09: Rate drops: 4.00% APY up to $10K (Chk), and 2.00% APY up to $35K (MMA)
• 4/08/09: Redneck Bank stops accepting new applications
• 3/12/09: New tiers: 5.25% APY only up to $10K (Chk), and 3.10% APY only up to $35K (MMA)
• 3/31/08: Original tiers: 5.25% APY up to $25K (Chk), and 3.10% APY on all balances (MMA)

As I described in this post, RedneckBank.com, Evantage.com and AmericaNet.com are internet divisions of three Oklahoma banks which are all owned by the Huckabay family. The three banks have separate FDIC charters, but they've been keeping these accounts very similar.

For details about these banks and accounts, please refer to the following posts:

• Evantage Bank Reward Checking Review
• Redneck Bank Reward Checking Review
• AmericaNet Bank Reward Checking Review
• Review of the banks' Mega Money Market Account
• History of Redneck Bank

Thanks to the readers who mentioned these rate cuts in emails and in the comments.

Other Reward Checking Accounts

With these three banks cutting their reward checking accounts to under 5%, the remaining nationwide 5% reward checking account list is shrinking (see list). Bank2 is still offering 5.01% APY on its reward checking account, and as of 4/19/09, it's still advertising a rate guarantee until 1/1/2010 (see post). But as we learned with Redneck Bank, they could still lower the balance cap which is as bad as a rate cut. The best bet for picking a reward checking account may be choosing one with a top rate in the 4% range. Those might not attract as many deposits as the rate leaders. First Arkansas Bank & Trust is a good example. The top rate is 4.44% APY, but this applies to balances up to $50K. Their last rate cut was February 7, 2008 (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.

Tags: AmericaNet Bank, Redneck Bank, Evantage Bank, savings account