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Kasasa - The New Name of Reward Checking and Savings Accounts
POSTED
ON BY Ken Tumin
When I first came across Kasasa.com, it appeared to be a new competitor to BancVue's reward checking. However, from the Kasasa About Page I learned that it was just new offerings from BancVue and FIRST ROI. Here's how BancVue's CEO describes Kasasa at their Kasasa blog:
BancVue and FIRST ROI already have CheckingFinder, so I wasn't sure of the purpose behind Kasasa.com. But after reviewing their website and blog, it appears they're trying to expand their reach. Some examples of this include:
New Savings Accounts
There is one new Kasasa product that should appeal to savers. It's called Kasasa Saver. It's designed as a companion savings account to the checking, Kasasa Cash. It should appeal to those who have balances that go over the balance caps of the checking accounts. Let's say you have $100,000 and the checking has a cap of $25,000. You can earn the high interest on the $25,000 in the checking, and $75,000 can be in the savings account. The savings account typically has lower rates than the checking, but they're competitive with the national online savings accounts. You'll still have to meet the checking requirements to earn the high rates on the savings accounts. So if you forget, you'll lose out on a month of interest on a lot of money.
There are currently not too many Kasasa providers and fewer that offer Kasasa Saver. Also, not all offer their products nationwide. One that offers all Kasasa products nationwide is a bank that has long offered the reward checking account, First Arkansas Bank & Trust (FAB&T). I first reported on this bank in December 2007 when it was offering a nationwide 6.06% reward checking account without a balance cap. They became too popular, and they slashed their rate to 4.44% in February 2008. In addition, they reduced the balance cap to $50K. That was a disappointment, but that was probably a good move that allowed them to maintain that rate and balance cap. After more than a year, they continue to offer the same 4.44% APY for balances up to $50K which makes them one of the best deals on my nationwide reward checking list.
Here are the current rates at FAB&T as of 5/13/09:
For the checking account, Kasasa Cash:
Other banks have higher rates on their Kasasa Saver accounts. One example is Bank of Little Rock which offers a 3.01% APY on all savings account balance if the Kasasa Cash requirements are met. The Kasasa Cash account has a top rate of 4.51% APY for balances up to $25K. Over $25K, the rate drops to 0.60%. In this case, the savings account makes more sense than at FAB&T. I have more details in my Bank of Little Rock review. Note, unlike FAB&T, the Kasasa online application for Bank of Little Rock appears to be limited to Arkansas zip codes.
Other Reward Checking Accounts
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.
By partnering with Kasasa, community banks and credit unions gain a level of product development awesomitude that until now was only afforded to the big banks.
But unlike the big guys (you know the ones that caused a worldwide economic crisis and might have cost someone you know their job), Kasasa doesn't use it's R&D skills to figure out how to squeeze more and more and more fees out of you. Instead, we try to figure out how to give more and more and more back to you.
BancVue and FIRST ROI already have CheckingFinder, so I wasn't sure of the purpose behind Kasasa.com. But after reviewing their website and blog, it appears they're trying to expand their reach. Some examples of this include:
- Using Blogger and Twitter to appeal to the younger generation
- Kasasa Tunes that rewards customers with free iTunes downloads rather than high interest
- Kasasa Giving that donates interest that your account earns
New Savings Accounts
There is one new Kasasa product that should appeal to savers. It's called Kasasa Saver. It's designed as a companion savings account to the checking, Kasasa Cash. It should appeal to those who have balances that go over the balance caps of the checking accounts. Let's say you have $100,000 and the checking has a cap of $25,000. You can earn the high interest on the $25,000 in the checking, and $75,000 can be in the savings account. The savings account typically has lower rates than the checking, but they're competitive with the national online savings accounts. You'll still have to meet the checking requirements to earn the high rates on the savings accounts. So if you forget, you'll lose out on a month of interest on a lot of money.
There are currently not too many Kasasa providers and fewer that offer Kasasa Saver. Also, not all offer their products nationwide. One that offers all Kasasa products nationwide is a bank that has long offered the reward checking account, First Arkansas Bank & Trust (FAB&T). I first reported on this bank in December 2007 when it was offering a nationwide 6.06% reward checking account without a balance cap. They became too popular, and they slashed their rate to 4.44% in February 2008. In addition, they reduced the balance cap to $50K. That was a disappointment, but that was probably a good move that allowed them to maintain that rate and balance cap. After more than a year, they continue to offer the same 4.44% APY for balances up to $50K which makes them one of the best deals on my nationwide reward checking list.
Here are the current rates at FAB&T as of 5/13/09:
For the checking account, Kasasa Cash:
- 4.44% APY up to $50K
- 1.76% APY over $50K
- 0.05% if requirements are not met
- 2.04% APY on all balances
- 0.05% if Kasasa Cash requirements are not met
Other banks have higher rates on their Kasasa Saver accounts. One example is Bank of Little Rock which offers a 3.01% APY on all savings account balance if the Kasasa Cash requirements are met. The Kasasa Cash account has a top rate of 4.51% APY for balances up to $25K. Over $25K, the rate drops to 0.60%. In this case, the savings account makes more sense than at FAB&T. I have more details in my Bank of Little Rock review. Note, unlike FAB&T, the Kasasa online application for Bank of Little Rock appears to be limited to Arkansas zip codes.
Other Reward Checking Accounts
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.
Who cares about awesometitude if you have the FDIC-tude, dude?
There's a solution to that however. The banks offering those reward accounts need to put a spending minimum per signature-based purchases. Maybe $25 or $50, such as what I do when buying gas or groceries, or perhaps the spending amount itself total to x-amount of dollars each month. If this doesn't occur, they don't get that reward rate.
Oh, and by-the-by, to Anonymous about Gen-X'ers using a made up word like "awesomitude" - they're all in their 30s, basically. Gen Y for sure, and not surprised if younger.
To summarize what I read on their web site, there are no mimimum balances but there is a minimum use requirement: a certain number of debit transactions per month. If you don't meet that requirement, you will still get regular interest and not high interest (I saw no actual figures on the Kasasa web site).
The itunes download rewards give me pause as to the whole system. Given that the average song on iTunes is 99 cents, I'd need a whole lot of music to feel like it was worthwhile. And if Kasasa thinks that's a good way to treat customers, I question their whole attitude toward customers. I'm suspicious by nature but this just seems like a blatant rip off and if they will do that to one segment of their customers, they will do it to others.
Quick reality check - a lot of people do not HAVE a free checking account, they pay 3, 6, some even 12 dollars a month just for the privilege of having a checking account. They may not have a lot of money in there, just putting in their paychecks and paying their bills. A quick Google search shows Kasasa-offering banks give between 5 and 10 free downloads a month... so instead of paying good money to have their checking needs met, these people can get it for free and in essence get paid $5 to $10 worth of downloads on top of that...
I guess it's all a matter of perspective. Sometimes it pays to look beyond our own specific situations!