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High Yield Checking (Or Reward Checking) -- A Good Bet

Sunday, June 2, 2013 - 6:53 PM

Some good statistics on RCAs: E.g., rate trending down and balance cap reduced over the years.  A good read:

 "So, why are some banks offering checking account holders a noticeable return, while others aren't?

"The theory is, it brings in a more affluent type of customer who's going to be a better potential lending customer as well," says Ron Shevlin, a senior analyst with Boston-based Aite Group.

The overall number of banks offering high-yield checking accounts has fallen since the financial crisis, casualties of a low-interest-rate environment and regulations that limit the amount of money that many banks can make when customers swipe their debit cards, Shevlin says.

Still, there are options out there. Though 12 percent of institutions offer accounts nationally but require in-branch signatures or notarization to open an account, 48 percent are available nationwide without stipulations. Another 39 percent are available with some geographic limitations.

In the end, McBride says how rewarding a rewards checking account is boils down to the research consumers do to be sure they fit the profile for any particular account.

"You've got to determine, 'Am I going to be able to meet those requirements consistently, how much cash am I putting in and what's going to be the best fit for me in terms of yield and balance cap so I can maximize my earnings?'" McBride says. "You've got to do a little legwork and make sure it's going to be a fit for you.""

My remarks: The APY is averaging about 2%, with a balance cap of $15,000.  This pair is definitely not worth the effort and time to meet the tedious requirements.  There are only a very few (local with strigent qualification rules) that offer (3%, $25K) or above.  For most people with money to deposit, (3%, $25K) is still worth the effort, IMHO. 

The most intriguing question is how one can find such a deal and qualifies for it.  Moreover, how one can find such a deal with some consistency and stability.  All I can offer is patience (in constantly searching and surveying), innovation (in finding rare and indirect pathway to qualify), and persistency.  Ken already provides the baseline table for the search.  It will take innovation and persistency for us to locate a deal for us.  Eventually one has to have a bit of luck as well. 

The several RCAs that I have at present did not come easy at all.  The one with top rate came with all three factors; plus luck.  The rest all came with the three factors I mentioned.  It pays off for me eventually.  Think of it this way: If it is easy, all will pour in and the rate/limit will drop in no time.  It is those rare ones with the highest difficulties that will likely to last the longest.

My bottom line conclusion is: RCA is definitely beneficial for all; as long as one makes some effort to get one and makes routine effort to meet the requirements.

Good luck.

51hh51hh1,476 posts since
Jan 16, 2010
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