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First Security Is Phasing Out Reward Checking Accounts

Saturday, July 27, 2013 - 8:11 PMFirst Security Bank (KY) - Details
First Security Bank has started notifying its Extreme reward checking customers in mid July 2013 that beginning September 3, 2013, they will be migrated to new non-interest bearing checking accounts with fees if a minimum account balance is not maintained.  Depending upon the customers banking relationship, a branch manager indicated that the bank sent out 7 different types of letters to customers but each nullifies the Extreme reward checking account in one way or another.  Apparently, the party is over for everyone after September 3, 2013. Thank You.
5
wisemanswaywisemansway9 posts since
Jan 26, 2013
Rep Points: 53
1. Saturday, July 27, 2013 - 9:11 PM
This is not good news.  Hopefully it does not become an RCA trend.
1
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,426
2. Sunday, July 28, 2013 - 6:20 AM
Re:  Saturday, July 27, 2013 - 8:11 PM

In January, you posted that the bank had increased the interest rate from 2.25 to 2.5%, lowered the balance cap from $25K to $15K, and increased the number of monthly debit card swipes from 10 to 12.  Now, six months later, more changes are announced.  

I don't necessarily see the bank's actions as sounding the death knell for their RCA.  I believe financial institutions see RCAs as good business in terms of attracting customers, otherwise so many institutions would not be offering them. 

Instead, based on your post, it appears the bank may be trying to filter the customers who are not using it as their primary checking account (whatever that means), only meeting the minimum requirements and maybe with minimal transaction amounts, and keeping the account topped off to earn the maximum interest.  Regardless of the repeated discussions that these actions would cause RCAs to be eliminated, based on posts here and on other forums, for some it's a badge of honor to meet requirements with 0.10 transaction amounts, and keeping the accounts topped off.   

Some institutions already have tighter restrictions on the use of their RCAs than others.  For example, at University of Iowa Community CU, RCA accounts that do not qualify for four months in a row are automatically converted to the Free Checking product (see discussion here).    One of my RCAs requires a minimum balance in the account to avoid a hefty monthly fee. Others have recently amended requirements to include minimum deposit amount, or minimum transaction amount (see 7/24 discussion of Heartland Bank). 

It would be interesting to know what was discussed in the other 6 letters sent to accountholders as that might give further insight into what the bank's intentions are for the account.

I don't think the party's over, but some guests are going to have to improve their behavior if they want to continue having fun.   ;)
4
pearlbrownpearlbrown1,433 posts since
Nov 2, 2010
Rep Points: 6,255
3. Friday, August 2, 2013 - 11:34 AM
Sorry for the poor wording above.  My reward checking is being eliminated as of September 3.  The conditions refer to avoiding fees on the new non-interest bearing accounts that customers such as myself are automatically being transferred into....  Thanks again.
2
wisemanswaywisemansway9 posts since
Jan 26, 2013
Rep Points: 53
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