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Bank of Internet USA1.25%-$150kRewards Checking
Accounts mentioned in this post. Rates as of August 22, 2014

Bank of Internet USA's New Rewards Checking Balance Cap


Bank of Internet USA

Bank of Internet USA has just added a balance cap to its Rewards Checking account. For new accounts, balances greater than $150,000 will not earn interest. For existing accounts, this balance cap will take effect on March 1, 2013. Before this change, all balances qualified for the top rate, which is currently 1.25% APY. Thanks to DA member ekat who posted on this news in the forum.

I'm sorry to see the balance cap, but at least it's still large in comparison to other reward checking accounts. Most reward checking accounts have caps of $25K, and many now have caps of only $10K.

I'm also happy to see the top yield remains at 1.25% APY. This yield has held since BofI launched this account in July 2011.

There are several aspects of this Rewards Checking account that make it unique. First, it's the only high-yield reward checking account that's offered by an internet bank. The vast majority are powered by BancVue and are offered from community banks and credit unions.

Another unique aspect is that you can still earn interest without completing all of the monthly requirements. It's not all or nothing. There are four sets of requirements per month. For each requirement that is met, an additional 0.3125% is added to the APY for the month. If all four of the requirements are met, the APY will max out at 1.25% (as of 1/31/2013). The four sets of requirements are listed in the rates tab of the BofI Rewards Checking page. These four sets of requirements include:

  • Receive direct deposits each month totaling $1,000 or more (0.3125%)
  • Pay 2 bills each month through our free online banking (0.3125%)
  • Use your Rewards Checking Visa Debit Card at least 1 time per month for normal everyday purchases (0.3125%)
  • Use your Rewards Checking Visa Debit Card at least 6 or more times per month for normal everyday purchases (0.3125%)

As you can see, you can earn the full rate by making just 6 debit card purchases per month. That's an advantage over most other reward checking accounts that require at least 10.

In addition to being competitive from a rate and balance cap point of view, the Rewards Checking account has some nice features such as no monthly maintenance fees, unlimited ATM reimbursements, free initial 50-pack of checks and online deposits of paper checks.

The downside with this Rewards Checking account is a relatively low yield of 1.25%. It's low as compared with other reward checking accounts. However, the vast majority of the other reward checking accounts have balance caps of $25K or lower. This new $150K balance cap is still 6x the size of the typical $25K cap.

Another downside is a weak ACH bank-to-bank transfer system. This is true with all BofI accounts. The standard inbound and outbound transfers are limited to $2,000 per day and $5,000 per month. After 90 days with use of the standard inbound and with no NSF incidents, you can fall in the standard high limit: $15,000 daily and $25,000 monthly. Even this is low. Also, ACH transfers take 3 business days in our out. They do allow you to pull/push funds using an external account.

Finally, in addition to the balance cap, BofI and UFB Direct notified customers of other account changes taking effect in March. There will be a $1 fee for each overdraft transfer that a linked account automatically covers.

Bank Overview

Bank of Internet USA was officially established on July 4, 2000. The bank is now called BofI Federal Bank. They have kept the name Bank of Internet USA, but deposit accounts held at Bank of Internet USA are FDIC insured through BofI Federal Bank.

BofI Federal Bank's financials have remained strong. Currently, it has an overall health score at of 4 stars (out of 5) with a Texas Ratio of 9.76% (above average) based on September 2012 data. Please refer to our financial overview of BofI Federal Bank for more details. The bank has been a FDIC member since 2000 (FDIC Certificate # 35546).

How This Reward Checking Account Compares

As I mentioned above, you can get much higher reward checking rates, but most of these have balance caps of $25K or lower. Two institutions are offering reward checking accounts that are nationally available with a 3% APY on balances up to $15K. These include Lake Michigan Credit Union and First Financial Bank. The highest nationally available rate for a $25K balance cap is 2.12% APY at ABCO Federal Credit Union.

If you don't want to worry about monthly requirements, you can get a promo 1.25% APY at two internet banks: EverBank and Salem Five Direct. For non-promo rates without balance caps, there are still two internet banks offering a 1.05% APY money market accounts. These are Union Federal Savings Bank and My Banking Direct.

The above rates are accurate as of 1/31/2013.

To find reward checking accounts in other areas of the nation, please refer to the reward checking section of To learn more about reward checking, please refer to this reward checking overview.

Edit: Corrected debit card usage requirement from 7 to 6.

  Tags: checking account, Bank of Internet USA

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Comment #1 by ekat posted on
Clarification on the debit usage - 6 total includes the first 1 (so not 7 total). Also, a csr said the $1k dd requirement can initiate from BoI or externally, so it's pretty much any $1k min. monthly electronic deposit.

Haven't verified fulfilling the dd with an internal pull, either by experience or in writing. These days, what a rep says isn't necessarily accurate. Making a note of csr names while jotting down info has been instrumental to remedy miscommunication. Also, bank mailing the same question to verify and document an answer has helped.  

The csr I've encountered have been pleasant, but certainly had varying degrees of experience.  Some know the details, while others try looking up answers with you in the disclosures or put you on hold to ask someone else. Maybe they had hired a number of new people at the time. But they all, including a supervisor, put forth extra effort, which I appreciate.

There were some online glitches with a new bill pay program last year, but it seems resolved. I still keep a particular eye out on those transactions, besides everything in general. My experience with BoI hasn't been without quirky hiccups, but they were reasonably resolved. So far, I'm pleased but extra watchful.

Given the recent gloomy path of rca, it's more positive for me to think of this as a rsa.  Then it seems a plus that its rate is higher than most savings, that checks can be used, and no Reg D restriction. If the cap remains high enough, then the requirements are way easier than the equivalent # of rca - a trade-off to consider with the rca rate & cap drops.  

Thanks, Ken, for the overview perspective and alternatives.  After "Sandy", I opted for this bank since its sole brick 'n mortar is within driving distance (not close but reachable). That may be more mental comfort than practical reality, which is why I'm still evaluating.  I appreciate you providing options.

Comment #2 by KenBDG posted on
Thanks ekat for the info. I made the correction to the post. And thanks for finding out that the $1K dd can be any ACH deposit.