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Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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6 Reward Checking Accounts with Yields of at least 3.00%

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It might seem strange that you can get a higher rate in a checking account than in a long-term CD. Of course these are not regular checking accounts. They're reward checking accounts that have monthly debit card usage requirements and balance caps that limit how much can qualify for the high rate. If you can live with these limitations, you can still find accounts that pay 3% and above.

It's very difficult to find CDs with yields of 3%. The highest CD yield that's available nationwide is 2.50% APY. This is a special 7-year CD that's offered from Patelco Credit Union as of 7/27/2012. The highest CD yield from an internet bank is 2.25% APY. That's a 10-year CD from Discover Bank as of 7/27/2012.

For reward checking accounts, the highest yield for a $25K balance that's available nationwide is 2.52% APY at ABCO Federal Credit Union as of 7/27/2012. However, there are still many local deals that offer 3% and over.

The nice thing about reward checking accounts is that you don't have to worry about early withdrawal penalties. You're free to move your money if you find a better deal or if some emergency pops up.

The important downside with reward checking is that there's no guarantee about the rate or the balance cap. Both can fall, and as we have seen in the last couple of years, they can have big drops. One example this year occurred at Pasadena Service FCU in California. In one rate cut in April its reward checking yield fell from 3.01% to 1.50%.

With these pros and cons in mind, below are a few reward checking accounts that still offer at least 3.00% APY on balances of up to $25K. All are local deals, but I listed ones that are available to fairly large populated areas:

Rates and balance caps are accurate as of 7/27/2012:

  • Coppermark Bank's Free High-Interest Checking still pays 4.00% APY on up to $25K. This is only one of two reward checking accounts in the nation that pay 4% on balances up to $25K. The other one is at a credit union which has a narrow field of membership. I first reported on Coppermark Bank in April 2009. The top rate hasn't changed since then. Its monthly requirement of 16 debit card purchases per month is a little tougher than most other reward checking accounts. Branches are located in the Oklahoma City and Dallas metro areas. When I last checked with the bank, I was told any resident of Texas or Oklahoma can open an account. However, a branch visit is required.
  • Old Florida National Bank's Optimum Checking pays 3.04% APY up to $25K. My first review of this account was in December 2009, and the rate and balance cap have held since that time. Branches are located in the Orlando metro area.
  • Centera Bank's Reward Checking pays 3.01% APY on up to $25K. I just did an updated review of this account in June. The account has remained competitive since I first reported on it in 2009. There's an online application currently open to Kansas residents.
  • Nassau Educators FCU's Go Green Checking is paying 3.00% APY on up to $25K. My first review of this account was in December 2008. Membership is open to anyone who resides in the large New York counties of Nassau and Suffolk.
  • Del-One Federal Credit Union's Better Life Checking pays 3.00% APY on up to $25K. This is a fairly new account that we have been tracking since November 2011. As I described in my review, membership in the credit union is open to Delaware residents.
  • University of Iowa Community Credit Union's Rewards Checking pays 3.00% APY on up to $25K. The account yield just fell from 3.25% to 3.00% on July 1st. However, the rate has held up well since my 2008 review. Credit union membership is open to residents of several Iowa counties.

To find the highest reward checking rates in your area, please refer to our reward checking rate table. This can also be used to find accounts available nationwide. If you're new to these tables, my rate table guide should be useful.

If you're new to reward checking, my blog post, 10 Common Traits of High-Yield Reward Checking, should be useful.

  Tags: checking account

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Comments
5 comments.
Comment #1 by 51hh posted on
51hh
Thanks for the very informative post, Ken.

There are several 3.5% RCAs (between 4% and 3%), such as UMB.

3
Comment #2 by Anonymous posted on
Anonymous
This is really a sad time in our history.  Checking accounts paying more interest/rewards than long-term CDs.  I'm sure the banks are just hoping we'll miss some of the requirements to get the rewards.  If they pay out too many in rewards then they'll just lower the interest rate.  Good luck.

8
Comment #3 by pua posted on
pua
I just opened a reward checking account that paid me 20% interest upfront.  WHAT?  Here's how it worked.  A small local bank had an ad in the newspaper:  open a new checking account for at least $500 and immediately get a $50 gift card for Wholefoods.  The account must stay open for at least 180 days, has zero monthly fees and zero per-check fees, and pays zero interest.  They gave me 6 starter checks (which means I can avoid buying any checks).  After the 180 days, I'll simply write a check for the entire $500 to put the money back in the other bank from whence it came.  Meanwhile I'll enjoy $50 in free food.  In fact, after a couple weeks I'll probably use one of the starter checks to put $400 back where it came from, leaving the remaining $100 to satisfy minimum balance requirement, until the 180 days has expired.  Sending the $400 out of the account would raise the effective interest rate to perhaps 70%.  Wow!

1
Comment #4 by 51hh posted on
51hh
$50 GC for account opening:

1. It is only a one-time offer.

2. People have done that in addition to their RCA accounts.

3. $50 is too low relative to other similar offers.

4. Staying open for 180 days is too stringent relative to similar offers.

5. One needs to watch the new account closely for 180 days for potential hidden fees (e.g., inactivity fee).  One needs to remember to close accounts after 180 days.

In sum, it is not a good deal IMHO.

Just my input:-)

 

6
Comment #5 by dunker posted on
dunker
pua, you sound really proud of yourself. You ripped off a small local bank for $50. If it was Citibank or Chase, I might see the rationale. But to take advantage of a small community bank that's trying to increase its local customer base just seems petty to me. You sound like a ten-year old kid bragging to his friends about how he stole a candy bar from a local mini mart. Shame on you.

7
Comment #6 by Anonymous posted on
Anonymous
#5 I don't have any issues with big banks unlike a lot of people here.  It really doesn't matter to me whether it's big or small. I live in Fremont CA a city of 200,000. We have all the big banks in town, with multiple branches. We also have Fremont Bank, a "community bank", privately & locally owned with branches that encompass just the city & 2 adjacent smaller towns. By all accounts the quintessential "small community bank" that you people always talk about here. However, as far as I can tell the rates are about the same whether you're borrowing from them or depositing with them. 

And no other bank here has a more ostentatious display than these guys. Their main branch reserved parking contains a fleet of 16 ( I counted) brand new Mercedes S550 company cars.............These cars are all leased of couse, but retail in the $110k range. Now if these cars were parked outside of JPM or Citi, I'm sure you guys would make some disparaging remarks or be organizing a protest. But they're outside a small community bank. Like it or not, a bank is a bank is a bank.

3