Accounts mentioned in this post. Rates as of September 2, 2010.
TrustBank is offering a high-yield reward checking account that is a bit unusual. It offers a very high yield, but it applies only to a very small balance. So it's definitely not for those with large savings. For those who maintain an average balance of under $2,000, it may be something to consider.
TrustBank's reward checking account is called iChecking and it pays 7.00% APY on balances up to $1,000 as of 7/26/2010. Over $1,000, the rate goes way down to 0.20%. To qualify for this rate requires the following monthly activities:
- 10 debit card purchases
- One direct deposit
- Two Online Bill Pays or automatic payments
- Receive E-Statements
- Access Online Banking at least one time per month
There are no ATM fee refunds, but you have free access to the Allpoint ATM network. There are no monthly service charge and no minimum balance requirement.
When would this account be worthwhile?
This account would only be useful for those who don't have much savings. If you think you can keep an average balance of at least $1,842, you would do better in a 4% reward checking account with the typical $25K balance cap. An average balance of over $2,500 in a 3% reward checking account would do better than this iChecking account.
Another option for those who don't have much savings would be a regular free checking account combined with a cash-back credit card. If you spend $500 per month with a 2% cash-back credit card, your yearly return will be $120. With this iChecking account, you'll only make around $70 per year if you maintain an average balance of at least $1,000. If you prefer debit cards, PerkStreet Financial's checking account would be something to consider (see my Perkstreet Financial review).
Small Promotion
TrustBank is offering a little bonus for opening the iChecking. Here is how they describe the bonus:
Open iChecking online and receive a TrustBank T-shirt and a coupon for an additional $25 deposit into a DreamBuilder Certificate of Deposit opened online.
Application
The bank has an online application via andera.com that allows ACH funding. Last week I asked the bank if they allow out-of-state applications. Here was their reply:
We accept customers from anywhere in the U.S. providing they pass our identity verification procedures.
If you prefer a branch visit, the bank has branches in Illinois and in Tempe, Arizona.
Financial Overview
TrustBank's ratings for safety and soundness are fair: 3 stars (adequate) at BauerFinancial, 3 stars (performing) at Bankrate.com and an overall health score of 4 out of 5 at DepositAccounts.com (see our financial overview for TrustBank). These ratings are based on 3/31/10 financial data. The bank has been a FDIC member since 1934 (FDIC Certificate # 14662).
Other High-Yield Reward Checking Accounts
Fortunately, the vast majority of reward checking accounts have balance caps of at least $25K. However, lower caps of $20K to $10K are becoming more popular.
Please refer to the reward checking section of DepositAccounts.com to find reward checking accounts in your state or that are available nationwide.
