Washington Savings Bank has a new type of reward checking and savings account that's better than the typical type of bank checking and savings accounts, but they're not as good as the high-yield reward checking accounts that many savers are now depending upon for reasonable yields.
Instead of a high yield checking, the bank offers what it calls a Cash Rewards Checking in which they pay cents back on each signature-based debit card purchase. They have three different accounts. One is a free checking with no interest and the other two have potential monthly fees along with a little bit of interest. The one with the highest interest rate requires $100K balance just to qualify for 0.71% APY. Here are the details related to the Cash Rewards:
* Earn 7 cents for every signature debit card purchase with a Cash Rewards Checking Account
* Earn 3 cents more for every signature debit card purchase with a savings account with a monthly automatic deposit transfer or direct deposit
* Earn 10 cents more for every signature debit card purchase with a Washington Savings Bank loan of at least $5,000.
* Total 20 cents cash reward with every signature debit card purchase!
Internet Reward Savings Account
They do provide a way to get a decent interest rate, but it's not as attractive as what we have come to expect from reward checking accounts. To earn a decent interest rate, you have to open the bank's internet savings account called eSavings. The rate is 1.53% APY on balances up to $50K and 1.22% APY for balances over $50K. These rates are listed at the bank's rates page as of 5/03/2010. This account is a little like a reward checking account. Note the account details at the bottom of the rate table:
eSavings is an online only account. It can only be opened, funded, and accessed online. eSavings account requires a checking account with at least a direct deposit or 5 debit card purchases per month.
Note, FIRST ROI has its name on the website. They're the marketing company behind most reward checking accounts. So I wonder if we'll see more of these types of reward checking and savings accounts in the future? They definitely won't be as generous to low-spenders with large balances.
For those who may be interested in these accounts, you can apply online. However, the first page of the application states:
We can only accept applications from Massachusetts and New Hampshire at this time.
Washington Savings Bank has branches in the Massachusetts cities of Lowell, Dracut and Tyngsboro.
The bank's ratings for safety and soundness are mixed: 5 stars (superior) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 12/31/09 financial data. The bank has been a FDIC member since 1985 (FDIC Certificate # 90229).