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Update on the Best Nationwide Reward Checking Account - Bank of the Sierra

POSTED ON BY

Bank of the Sierra
Update 12/03/09: The top rate has fallen to 4.09% APY. Sorry to see the drop come only a couple of days after this post. It was probably being planned long before this post. So don't blame the bankdeals effect ;-)

It has been almost a year since I first reported on Bank of the Sierra and its reward checking account. It's one of the very few banks that have not cut the rate or reduced availability this year. The top rate continues to be 4.51% APY for balances up to $25,000. Also, they continue to accept applicants nationwide. This puts them on top of the nationwide reward checking list for the best rate.

In my Bank of the Sierra review a few readers have reported being rejected by the online application. One reader thought he had been approved and saw his initial deposit deducted instantly from his current account. He found out later that he had been rejected. Note, it's best to open these accounts with the minimum initial deposit. If you do get rejected, you won't have to worry about losing interest while waiting to get back the money.

The last couple of readers have reported success in opening the account. Here's one commenter's review from November 25th:
I was accepted when I applied Nov. 4th and deposited 15k into Sierra. I received an email with a phone number asking me to verify my mother's maiden name (it was cc'd to 2 other people at the bank). It took three weeks to receive my card and pin, but when I phoned they are very nice and helpful - they knew who I was, what a pleasant surprise. Told me they have been swamped. Are giving me the 4.51% rate for the month even without my asking. I'm impressed with the customer service.

One thing a little worrisome is that the bank rep mentioned being swamped. As with any bank, once they bring in enough deposits, they will either lower rates or reduce availability. Hopefully, we still have some time before this happens.

Bank of the Sierra isn't a small bank. It has 24 offices in California with over $1 billion in assets and deposits. That should help it from being too overwhelmed by new reward checking customers.

We shouldn't have to worry about the FDIC forcing rate cuts. Bank of the Sierra appears to be financially healthy. Its ratings for safety and soundness are fair: 3 stars (performing) at Bankrate.com and 3½ stars (good) at BauerFinancial. Both ratings are based on 6/30/09 financial data.

Have you opened an account at Bank of the Sierra? If you have, please leave a comment about your experience.

  Tags: Bank of the Sierra, checking account

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Comments
38 Comments.
Comment #1 by Anonymous posted on
Anonymous
According to the bank association of America, there are over 3 millions people actively participating in the reward checking accounts.
If only 50000 people switch to Bank of Sierra with 20K average balance, the bank will be closed by FDIC, if only 25000 people do that the bank will be put on the warning list by FDIC. According the CSR at the banks, they already have over 20000 reward accounts opened.
It will take very little time for this bank to be over the limit on accounts opened and then either her rating will plummet or they must reduce the rate to stay afloat.

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Comment #2 by Anonymous posted on
Anonymous
I dispute you labeling as the best RCA.
Not 0nly there are many with 5% but you should also take into account the total rate after the first tier.
In my opinion best is Founders bank in TX with 2.25% after 10k.

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Comment #3 by Anonymous posted on
Anonymous
My application in Oct 2009 went smoothly, and all of my materials were received in a timely manner. I did have an issue the first full month however. I interpreted that viewing my statements online was the same as E-Statements. Now I know that these are two different items, but the E-Statements page seems hidden so you can't see it (i.e. you have to scroll down to notice.) I lost my first full month of interest on over $25,000 because of this.

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Comment #4 by Rick (anonymous) posted on
Rick
Anonymous:

Agreed there are many 5% accounts but Bank of the Sierra is available nationally which helps people like me that do not live in a state that offers 5%.

When you sign up be sure to remember your original login and password because you will need them to request Estatements. The link is not in your account but on the homepage, bottom right. This threw me until I emailed and asked where the link was.

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Comment #5 by Anonymous posted on
Anonymous
I was rejected by the bank for having too many bank accounts open.

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Comment #6 by Anonymous posted on
Anonymous
I have to take issue on this topic. This is not prudent at all to highlight RCAs, especially this nationally availbale one. We at FWF has a term called "FWF effects" and this post will certainly attracts more interest and eventually the fall (either in rate or national availability or both) of BotS.

Thanks to you, Ken.

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Comment #7 by Tuphat (anonymous) posted on
Tuphat
@ Anon 11:02 -- Exactly what do you suggest as an alternative? Should the Banking Deals blog purposely omit, say, the best X% of deals to avoid the "Fat Wallet Effect"?

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Comment #8 by Anonymous posted on
Anonymous
Answer to above post and request for Ken:

1. Keep RCAs in the highyield accounts list without "highlight" such as this one.

2. For example: In FWF, there are already two topics on RCAs (Accounts and Issues). But there are seldom any discussions on specific RCAs, especially not the "top nationally available" ones. The purpose is to keep such information to sensible party instead of those who are stupid enough to ruin the deal (if you know what I mean).

We appreciate Banking Guy's informative effort and updating for sure. But a daily highlight like this one will only expedite the death of the BotS offer.

2
Comment #9 by Anonymous posted on
Anonymous
Did I miss $50.00 to open and 12 transactions er month to qualify?

1
Comment #10 by Anonymous posted on
Anonymous
I've tried to open this reward checking account twice and both times first I had an email "Welcome to the bank of Sierra" and then the email that I was rejected.

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Comment #11 by Anonymous posted on
Anonymous
I had same rejection x 2; each time told I had to contact credit bureau about the inaccuracy. I finally got a manager who said that they could override the external credit check by reviewing the incorrect data (they had an no longer valid driver's license listed), and then I was able to open an account.

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Comment #12 by Tuphat (anonymous) posted on
Tuphat
@ Anon 1:21 said: "The purpose is to keep such information to sensible party instead of those who are stupid enough to ruin the deal (if you know what I mean). "

I have no idea what you mean. Presumably, sensible parties have already opened accounts. Market rates will impact yields more than additional accounts from "stupid" depositors will.

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Comment #13 by Anonymous posted on
Anonymous
Hi Tuphat,

No, no.

By sensible and prudent people I meant normal non-greedy people.

For example, there was a Charter One GC deals at FWF several years ago: To get cash from GC without any fees. The benefit was to get cash rewards from credit cards for free (like today's silver dollar coins deal but simpler). It worked very well in the beginning. Then "greedy" stupid people joined and did hundreds of GCs ($500 a piece) and upset bank operation, credit card companies, and swamped Charter One... All kinds of problems occurred afterwards. The cc started charged cash advance fees, banks stopped taking those GCs for cash, and Charter One terminated the POS usage. The deal was dead.

The moral of the incident was to keep the good deal alive by keeping it at low profile and secretive (like the Fragile Deal Group). I do not want to explain/suggest what "stupidity" means in this one; but I think that you get the drift.

To discuss this one openly will just invite those locust to the dinner table. It already happened to a lot of RCA deals. So it (FWF Effect) is REAL.

I should stop right here to let this topic die by itself:-)

Best Regards.

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Comment #14 by Gordon Gekko (anonymous) posted on
Gordon Gekko
Greed is good.

1
Comment #15 by AtHome Dad (anonymous) posted on
AtHome Dad
Re: "FWF effects" and "stupid enough to ruin the deal"

The comments by "Anon" about keeping deals alive by keeping them quiet deserves a full response, rather than a quiet death. I have tried to address this with appropriate balance of politeness to offset my incredulity. I apologize in advance if I failed the mix, and appear inflammatory.

So let's see, if I find a good rate by perusing the High Yield list, am I to avoid the best deal for me so as to not "kill the deal" for those who came before me?

Do I need to run all my own research without the benefit of lessons learned by others -- a seemingly appropriate outcome of a blog or consumer website?

Who decides who is a "sensible party" and thus deserving of access to bargain information?

The FWF Effect is very debatable, if not doubtful. What is the statistical support for the FWF Effect? How can you be sure that "daily highlight(s)... only expedite the death of the BotS offer(s)." Certainly the flood that killed the Charter One deal didn't all come from FW, forum or no forum. Any effect a deal gets from readership of this blog or any other is probably overstated, and is speculation without the ability track the numbers.

As for the comment: "But there are seldom any discussions on specific RCAs, especially not the 'top nationally available' ones." This doesn't seem very useful, helpful, or conducive to educating banking consumers at all. This is probably why I don't find Fat Wallet all that helpful. However, I do consult this blog daily. Again, who decides who gets to access the information? Furthermore, who decides who gets to actually take advantage of it?

It seems to me that one definition of greed is "getting yours and making sure you prevent others from getting it too." What I find at Bank Deals is information, education, and collaboration. All wonderful resources when trying to become independent at financial management. I've learned more about the banking process by reading this blog and the daily and weekly highlights than I ever could have learned on my own. I still do my own vetting of deals, but now I have the advantage of starting with a wealth of input from Bank Deal readers and Ken.

It seems to me one definition of stupid is to overestimate your own importance and influence. The attitude of keeping information "low profile and secretive" so as to keep it for the "sensible and prudent, normal, non-greedy people" is fantasy, insulting, greedy, selfish, and several other adjectives I'll keep to myself. ("But I think that you get the drift.")

Deals, like this discussion, will die on their own merit, not because some little group was able to keep it quiet and impose their will.

Best regards back.

2
Comment #16 by Anonymous posted on
Anonymous
Just opened an RCA @ BotS last week with no problems. My debit card came with a typo in my last name so I called and spoke with a friendly woman over there who fixed the error and re-issued me a new one that hasn't arrived yet, but also assured me that I get the 4.51% during the first month regardless.

1
Comment #17 by Anonymous posted on
Anonymous
To all of you who posted about the FWF effect. Stay out of this blog and there will be no FWF effect.
You are the one who swarm the banks on any deal posted. We are not doing it here. We explore, coordinate, discuss and exchange more inputs about the deals.
Most of us on this blog are not greedy and don't jump in on every deal posted by the banking Guy.
We are sensible and more prudent than the folks at FWF.
Therefore, stay out of it or become one of us by not posting at FWF blogs.

1
Comment #18 by Anonymous posted on
Anonymous
To: AtHomeDad - beautifully said. Thank you for being a voice of reason.

1
Comment #19 by Anonymous posted on
Anonymous
AHD: To your long debate, I would say A+ for effort.

But: (1) You confuse usual information (such as application CSR, and bank attitude experiences) with hidden "greedy" oriented information (like what loopholes I can use, what tricks I can take advantage of). Usual information is provided both in FWF (two long forums in fact) and this forum. Obviously,you have no idea what FWF spirit is. So, I will stop here.

(2) FWF Effects: I admit that there is no formal statistics about it. But taking the previous definition of "hidden" information and applied to any deal, it is bound to fail more quickly than normal.

I can see most of you folks here are rather conservative (which I admire) and innocent (which I respect). Thus I will conclude that no harm is done with this topic being posted here (hopefully).:D

How do I know? Well, no FWF tricky questions/answers were posted.

An advice to all (and to myself): Do not generalize to make negative comments about any forums. Many here participate in FWF as well (including some folks you highly praise; hint, hint).

1
Comment #20 by Anonymous posted on
Anonymous
FatWallet spirit is to be moderately greedy/sneaky, but not to the extent of abusing, hehe.

1
Comment #21 by Anonymous posted on
Anonymous
I was once at FW blog, curiosity killed the cat however.
It seems to me, most of the people over there have herd mentality. They are asking OP for what to do next or not to do anything. If OP says go, then most of them follow the leader.
If OP says jump overboard, most of them jump and then praise each other of how smart they are.
Pathetic and low life persons pretending to be smart. That is what FW has become.
I know, Ken visits FW to find some deals and some of us glimpse in from time to time, that is OK and normal. Nothing to be ashamed about, but if that becomes obsessive and follow the leader is a must thing to do, then we have same problem as the FW folks.
So far, this is the most conservative blog for money and I like to keep it that way.

1
Comment #22 by Anonymous posted on
Anonymous
Above post: Most rational opinion I have ever saw. Yeah, I visited FW, too. They do have "Group thinking" and red all others who do not agree. That is the worst for any forum. They also have a lot of "trolls", who have nothing to do all day except insulting people. But one can get some information on credit card offers and RCAs. Thanks for the reminder: I should visit FW much less often.

1
Comment #23 by Anonymous posted on
Anonymous
Above Post: Most rational post I have ever saw for some time. Yes, FW does have herd mentality and red others who do not conform. They do have "group thinking" and exclude others. But they have some good credit card deals and RCA deals with good information. They have some decent people as well as trolls who have nothing better to do except insulting people.

Thanks for the remidner: I should visit here more often than FW.

1
Comment #24 by Anonymous posted on
Anonymous
Sorry for double posts...

1
Comment #25 by Anonymous posted on
Anonymous
I just noticed Bank of the Sierra Rewards Checking fell to 4.09%apy (today I think, since I logged in yesterday and don't remember seeing the change).

1
Comment #26 by Anonymous posted on
Anonymous
Yeah, it just happened today. There you go: Broadcast the best RCA, it will drop the next day...

1
Comment #27 by Anonymous posted on
Anonymous
Told you so.

1
Comment #28 by Anonymous posted on
Anonymous
2 things... you guys can **** and moan all you want about rate drops.. get used to it. In this economy its gonna happen. Lets face it.. we're all "rate chasers" here.. when the rate drops we move on to another bank. When THAT bank lowers the rate we move on.. Don't like it.. find another way to make money.

Now.. I recently opened an account with Bank of the Sierra. Does anyone know how to transfer money into and out of the account on the bank of the sierra website?? I haven't figured out how to do it. Yes I know I COULD transfer money from another bank and into THIS account. I just want to know how to do it from THEIR end. Thanks...

1
Comment #29 by Anonymous posted on
Anonymous
It is not possible to transfer money in and out of the Bank of the Sierra from their end. They do not have ACH transfer ability. You can use their online bill payment to send checks, or you can write checks if you ordered and paid for them. The only way to get money into the account is an ACH transfer from another bank or direct deposit.

1
Comment #30 by Anonymous posted on
Anonymous
Like they say: "Stupid is what stupid does." Live with it. There bounds to be people who cause the fall of the bank itself who cause the rate drop.

The smart thing is to adopt to changes and optimize one's financial scope.

BTW, moaning is a healthy way to let it go, so do not forbit complaining and moaning.

For the question on transfer, I will let you in for this one: listen and learn:-)

For each RCA, find out whether they offer free checks; if not, order one from carousel checks ar $5 (75 checks). This is your backup plan.

Second, sign up to Ally bank as a hub for all your rate chasing.

Third, get onto fatwallet to know the best time/day to do transfers for "double dips" during weekends.

Fourth, do ACH from Ally to meet the direct deposit requirements.

Since the rate already dropped, I am open to more questions, if any.

1
Comment #31 by REDROCKET (anonymous) posted on
REDROCKET
his is my first RCA.

Regarding the Direct Deposit requirement. Does paypal work? What other options do I have? Thanks?

I'll look into Ally, but for this month????

1
Comment #32 by REDROCKET (anonymous) posted on
REDROCKET
Regarding using Ally bank as a hub for DD ACH PULL PUSH. which account is best Savings, money Market? I don't plan on keeping much in it at any time.

1
Comment #33 by Amir (anonymous) posted on
Amir
Does this bank put a hard credit inquiry on your report?

1
Comment #34 by 51hh posted on
51hh
Red: Ally Online Savings.  Note that you can set up monthly ACH transfers from RCA bank to Ally (to meet the RCA monthly ACH requirement); the six ACH transfers monthly limit only applies to Ally outgoing ACH transfers.  

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Comment #35 by 51hh posted on
51hh
The two RCA accounts per household finally hit existing account holders as well, effective 6/4/10.

Time to close many of our BotS RCAs, before tthey close them for us.

1
Comment #36 by Anonymous posted on
Anonymous
Rate has dropped to 3.09%

1
Comment #37 by Anonymous posted on
Anonymous
Founders is beter in fact (4.26% and 1.66% post 10k limit) and wondering why it's not listed in the top banks for RCAs? Although the companion Savings 2% account for the High Sierra bank might make it equal.

1
Comment #38 by 1699hdd posted on
1699hdd
Bank of the Sierra is the worst bank ever ! dont go there !

1