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3.35% Reward Checking Account and 1.81% e.Savings Account at Peoples Bank in NC

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Update 9/07/09: The bank is no longer accepting Free Interest Checking applications from those outside of North Carolina.

Peoples Bank is offering a reward checking account called Free Interest Checking with the following rates if certain monthly requirements are met:
  • 3.35% APY on balances up to $50,000
  • 1.00% APY on portion of balance over $50,000
  • 0.10% base rate if monthly requirements are not met
The monthly requirements include:
  • 10 debit card purchases
  • One direct deposit or draft
  • Receive e-statements
Additional features of the account regardless of the monthly requirements include:
  • $100 minimum initial deposit
  • No minimum balance requirement
  • No monthly service charge
  • Free internet bill pay
  • free ATMs nationwide (according to CSR, they refund fees charged by other banks the next day regardless of meeting above requirements)
Online Savings Account

The e.Savings Account has the following rate tiers as of 10/17/09:
  • 1.81% APY on balances of $10,000 and above
  • 0.50% for balances under $10,000
Important features of the e.Savings account includes:
  • $500 minimum opening deposit and minimum daily balance to avoid $15/quarter fee
  • Interest credited quarterly
  • six free withdrawals per quarter. Then $2.50 per withdrawal beginning with withdrawal seven
  • Must receive statements electronically
I highlighted the quarterly in the above features since this is a downside to the account. Most other savings accounts credit interest monthly and allow 6 free withdrawals per month. Nevertheless, for those who open the Free Interest Checking account and may go over the $50K balance, this savings account could be a decent account to have.

Update 9/07/09: The reward checking application is now limited to North Carolina residents. The online savings account application continues to allow out-of-state people to join.

Both accounts have online applications that allow people from any state to apply (see above). I called their toll-free number (877.802.1212), and the CSR also confirmed this. Note, the instructions state that only US citizens are eligible. The first page of the application states that they will verify with consumer credit reporting agency to determine eligibility. According to the CSR, they only do a soft credit inquiry, so there should be no ding to your credit score (Note, CSRs are often wrong about this.) I wasn't able to get any details from the CSR about their bank-to-bank ACH transfer service. Their online banking demo has a tab for external tranfers, and in that page there's a form that's intended to be printed and mailed with a voided check to add an external account.

The bank is headquartered in Newton, North Carolina with 17 branches in western North Carolina.

Peoples Bank has some decent ratings for safety and soundness: 4 stars (excellent) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 3/31/09 financial data. The bank has been a FDIC members since 1934 (FDIC Certificate # 5956).

Other Reward Checking Accounts

The rate of this Peoples Bank reward checking account is below average for reward checking, but on the plus side the balance cap is higher than average. There are not many nationwide reward checking accounts that have balance caps at or above $50K. Note, it has been common for banks to change their policies on nationwide availability, so if a policy changes, please leave a comment.

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.

Account History:
10/17/09: e.Savings: 1.81% APY over $10K
08/31/09: Free Interest Checking: Restricted to North Carolina residents
07/21/09: Free Interest Checking: 3.35% APY up to $50K; 1% over; 0.25% base (available nationwide) e.Savings: 2.02% APY over $10K; 0.50% under $10K

  Tags: Peoples Bank, North Carolina, checking account, savings account, reward checking account

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Comments
4 Comments.
Comment #1 by Anonymous posted on
Anonymous
I have an account with Peoples Bank.

Their ACH is slow and it takes 3 business days,not counting the day you initiate the transfer, which actually make it 4 days, excluding Sat. and Sun. and Holly days.

They did a Hard credit pull on me, but I applied for overdraft protection, so that may have triggered it.

1
Comment #2 by Andy (anonymous) posted on
Andy
Their Reward Checking ("Free Interest Checking 3.35%) account is now limited to North Carolina residents only, as stated on their website, and confirmed with CSR today. Please switch this listing from nationwide to state specific.

1
Comment #3 by Anonymous posted on
Anonymous
As of today, 12/05/2009, you state that: Peoples Bank - 1.81% ($500 min). However, this is not true; in order to earn 1.81%, you must have $10,001. Please correct~!

1
Comment #4 by Anonymous posted on
Anonymous
rep says if you withdraw funds before they are credited at the end of the quarter you FORFEIT all interest for that quarter. SCAM

1