Consumers Credit Union has added a rate guarantee to its free reward checking account. It's guaranteeing 4.09% APY until June 30, 2012. This is listed on the credit union's rates page:
Tired of big-bank “bait and switch” teaser rates? Try CCU’s FREE Rewards Checking account, GUARANTEED 4.09% Annual Percent Yield (APY) rate through June 30, 2012!
It's important to note that this 4.09% APY is only for balances up to $10,000. The portion of the balance between $10,000 and $25,000 only earns 0.56% APY, and the portion above $25,000 earns only 0.35% APY. If you don't meet the monthly requirements, the rate falls to 0.01%. The monthly requirements include:
- 12 signature-based debit card purchases
- one direct deposit OR one ACH debit OR online bill pay
- Access Online Banking
- Receive Electronic Statements
In addition to the high rate, there are also ATM fee reimbursements.
Consumers Credit Union's reward checking account has a long history. I first reported on this account over four years ago on August 2007. At that time it was paying 6.01% APY for balances up to $25K. Even though the rate and balance cap have fallen, it's nice to see that the account is still going strong.
Is the $10K Balance Cap a Deal Killer?
The $10K balance cap may be a deal killer for many. However, it's important to consider the blended APY. Our rate tables can help you with this comparison. When we designed the rate tables, we decided not to provide the blended APY since this would be confusing. We didn't want our rate tables to conflict what you see at the banks' websites.
Instead of computing the blended APY, we added the column "1yr Estimated Earnings". This shows how much you would earn with a certain investment amount during a year. Select the "Filter Accounts" button to adjust the investment amount.
If you adjust the investment amount to $25,000, you'll see an APY of 0.56% for this reward checking account. This is the APY that applies to a $25K balance. To compare this with the other accounts, refer to the 1yr estimated earnings. You'll see it's $493. This is just under Connexus Credit Union's Xtraordinary Checking account which currently pays 2.00% APY for balances up to $25,000. Thus, Consumers Credit Union's blended APY for a $25K balance is just under 2.00%.
It's important to note that Consumers Credit Union is only guaranteeing 4.09% through June 30, 2012. I don't see any guarantee of its second tier rate, and this has been recently reduced. If this drops to zero, the blended APY falls from 1.97% to 1.64% for a $25K balance.
Another thing that makes this a good deal is Consumers Credit Union's refer-a-friend promotion. When you refer a friend to open the reward checking account, both of you will receive $50. Refer to the credit union's refer-a-friend promo page for the full details. If you want to request a referral, please limit your request to this forum thread.
Multiple readers have mentioned that they were rejected in the application process. Here's a comment from one reader:
They are declining people who have a large number of inquires with ChexSystems and since they pull your funds right away (before a determination is made) and you have to wait 10 business days to get your funds returned. PROCEED WITH CAUTION!
If you do apply for the checking account, it makes sense to fund the account with the minimum required. If you do get rejected, at least you won't have much money locked while you wait for the money to be returned.
The credit union continues to make it easy for anyone to join. According to its membership page:
Membership follows a simple, two-step process: Pay a one-time, non-refundable $5 fee to our sponsor, the Consumers Cooperative Association, and then deposit and maintain a minimum $5 in your Membership Share/Savings Account.
There's an online application that's provided by Andera. It appears to allow you to apply for both the association membership and the credit union membership at the same time. You can also select the accounts that you want to open and fund the accounts with an ACH transfer from a checking or savings account.
Credit Union Overview
Consumers Credit Union branches are located in the Illinois cities of Gurnee, Mundelein, Round Lake Beach, Gurnee, Volo and Waukegan.
The credit union has an overall health score at DepositAccounts.com of 4 stars (out of 5) with a Texas Ratio of 16.12% (average) based on June 2011 data. Please refer to our financial overview of Consumers Credit Union for more details. The credit union is federally insured by the NCUA (Charter # 68588).
Finding Other Reward Checking Accounts
To find the best reward checking accounts in your area or that are available nationwide, please refer to our reward checking account table. Use the "Filter Accounts" button on top of the table to select either nationwide accounts and/or your state. Also, you can use this button to select the investment amount. This allows you to compare accounts with different rate tiers. For more details about how to use the rate tables, please refer to our rate table guide.