Update 3/30/2012: According to First Security Bank & Trust, they are longer offering the Reward Checking product online.
Update 3/20/2012: For those considering this bank's reward checking account, please note this bank's history as reported by this reader.
As I mentioned yesterday, reward checking is still going strong. This CNNMoney article was published today showing how reward checking and other Kasasa products are helping community banks work together to compete against the megabanks.
For savers, the two main concerns are rates and the balance caps. Both have fallen in the last few years, but reward checking remains a good alternative to internet savings accounts. Another concern is availability. Most reward checking accounts are local deals. If you don't live near the bank, you can't qualify for them. However, a few community banks have made their reward checking accounts available nationwide. This doesn't always last. It has been common to see banks restrict availability to their home state or to their local market area.
One example of a bank that has restricted its reward checking account is First Security Bank & Trust. It was nationally available when I first reported on it in 2009. About a year later the bank restricted availability to its home state Iowa and its neighbor state Minnesota. Recently, the bank has gone back and made it available nationwide. Unfortunately, the rate and balance cap have fallen since 2010 so it's not the best reward checking account that's available nationwide. Nevertheless, it's another reward checking option for those who don't have any good local deals.
Below are the First Security Bank & Trust reward checking rates and features as of 2/17/2012:
- 2.30% APY up to $15,000
- 0.60% APY on portion above $15,000
- 0.05% base rate if requirements are not met
- ATM surcharge fee refunds up to $25 per month
The account has remained free without minimums and monthly service charges. Its monthly requirements are typical for reward checking:
- 10 check card POS (point of sale) transactions
- one direct deposit or ACH debit
- Online banking access
- Receive e-statements
You can access its online application at the bank's reward checking page. I confirmed with the bank that people in any state can apply and no branch visit is required. As I mentioned above, this bank has reduced the availability of this account in the past so it could do it again in the future.
First Security Bank & Trust branches are located in northern Iowa.
The bank has grown quite a bit since I first reviewed this bank in 2009. Its assets have increased from $245 million in 2009 to $432 million in 2011. Its overall health score at DepositAccounts.com is 3 stars (out of 5) with a Texas Ratio of 20.76% based on September 2011 data. The bank has been a FDIC member since 1934 (FDIC Certificate # 1852).
How This Rate Compares
For reward checking accounts available nationwide, the best rate is 4.09% APY but the balance cap is only $10K. This is available at Consumers Credit Union. Two extra perks are that the rate is guaranteed until 6/30/2012, and the credit union has a nice refer-a-friend bonus.
Another good nationwide deal is at INOVA Federal Credit Union which has a reward checking account called Ovation Checking that offers 3.00% APY for balances up to $20K.
You can often find better local deals. The best reward checking in the nation currently offers 4.00% APY on balances up to $25K.
Finding the Best Reward Checking Account
If you're new to reward checking, my post on the common reward checking traits should be useful. To compare reward checking accounts based on interest rates and balance caps, you can use our reward checking rate table. Refer to this post for details on how to use the rate tables.