High-Yield Reward Checking Account at Beacon Federal in Parts of NY, MA, TN & TX

Beacon Federal is offering a high-yield reward checking account with the following rates if certain monthly requirements are met (as of 2/1/2011):

• 3.00% APY on balances up to $20,000
• 0.90% on portion of balance above $20,000
• 0.25% base rate if requirements are not met

The monthly requirements include:

• 15 debit card purchases
• 1 direct deposit or ACH transfer
• Receive e-statements

These details are listed at the bank's reward checking promo page. Some additional features are listed in the truth-in-savings document that's in the online application. These include:

• $20 minimum opening deposit
• No minimum balance requirements
• Free first box of checks
• Free Bill Pay and Bank to Bank Transfers
• Surcharge-FREE ATM access on the AllPoint ATM network

There doesn't appear to be any ATM surcharge reimbursements. You'll have to use the AllPoint ATM network to avoid fees. For those who just want the high interest rate, this might be better since the bank won't be wasting money paying ATM fees.

There's an online application, and it appears it may be available nationwide. I've sent an email to confirm. Update 10/12/2010: (see 11/7/2010 note below) I called the bank and confirmed that you can open the account online from any state without a branch visit. Once you apply, they will mail you the required documents.Only one account is allowed per social security number. Update 11/07/2010: The online application includes the reward checking account for selection only for certain zip codes which appear to be in the bank's market areas in parts of NY, MA, TN and TX.

I reported on this bank last year when it was offering some high CD rates. At that time I was told that they allow people from any state to open accounts by mail as long as they included copies of two forms of ID.

Branches are located in Central New York, in Central Tennessee, in Chelmsford, Massachusetts, and in Tyler, Texas.

You might be wondering why they have branches scattered across the nation. The bank used to be a credit union serving the employees of the Carrier Corporation. According to the bank's About page

In 1999, we became a depositor-owned, federally insured bank, and in 2007 a publicly traded thrift-holding company.

The bank has an overall health score of 4 out of 5 with a Texas Ratio of 15.13% (excellent) based on 6/30/10 data. Please refer to our financial overview of Beacon Federal for more details. The bank has been a FDIC member since 1999 (FDIC Certificate # 35329).

Other High-Yield Reward Checking Accounts

The two downsides with Beacon Federal's reward checking is the $20K balance cap vs. the typical $25K cap and the 15-a-month debit card purchase requirement vs. the typical 10. However, it is paying a yield that's higher than average.

To find reward checking accounts in your state or to find those available nationwide, please refer to the reward checking section of DepositAccounts.com.

Rate History:

• 02/01/11: 3.00% APY up to $20K; 0.90% over; 0.25% base
• 09/12/10: 4.00% APY up to $20K; 1.25% over; 0.50% base