High-Yield Reward Checking Account at Citizens Bank Minnesota
Update 10/01/10: The top yield has fallen to 2.53% APY. See bottom of the post for the rate history.
Citizens Bank Minnesota has a reward checking account called Woo Hoo Checking. It pays 2.53% APY for balances up to $15,000 (0.51% for above) and refunds ATM fees (up to $25 per cycle) if the following monthly requirements are met: 1) 10 check card transactions, 2) one direct deposit or automatic payment, and 3) receive electronic statements. If these are not met, the rate falls to 0.25%. There is no minimum balance requirement and no monthly service charges.
Update 4/22/08: A reader reported being told by the bank that there is a $0.42 per online bill-pay transaction fee when you go beyond 5 per month.
Update 5/23/08: A reader reported that the bank is no longer accepting out-of-state deposits due to abuse. As of 8/10/08, the application now states that you must be a Minnesota resident to apply. The reader was also informed that existing accounts may be closed due to multiple small debit card purchases (few cents).
I asked the bank about opening an account by mail, and I was told that it is allowed. They will need to have a copy of your driver's license, a copy of your utility bill, and a phone number of an employer to verify employment. There's an "Apply link" on their webpage, but this pops up a PDF application to be printed and mailed in. Please contact the bank for the full application details.
Update 4/18/08: After reading reports that the bank's policy regarding opening accounts by mail may have changed, I emailed the bank again. Here is the reply I receivied:
We can open your account online. Once we receive your online application we request a copy of your drivers license and a copy of your payroll check or recent utility bill. After we receive that we will mail out the original documents for your actual signatures.
Branches are located in the Minnesota cities of New Ulm, Lafayette, La Salle and Lakeville. The bank has been FDIC insured since 1934 (Certificate # 8200).
Other High Yield Reward Checking Accounts
I've created a new label for all high yield reward checking accounts with nationwide availablity. My posts of all of these accounts are available at this page. For general information, history and discussion on these reward checking accounts, please refer to my reward checking overview. For a complete list of all of my reward checking accounts, please refer to my list of reward checking accounts around the nation
- 10/01/10: 2.53% APY for up to $15K; 0.51% over
- 06/30/10: 3.05% APY
- 09/02/09: 3.51% APY
- 01/07/09: 4.01% APY
- 11/06/08: 5.01% APY
- 02/19/08: 6.01% APY for up to $25K; 1.01% over; 0.25% base
When you register your Visa Debit Card with PayPal as a credit card, PayPal knows it is truly a debit card and not just a plain old credit card. So, they process the transactions not as a point of sale transaction (which is required for your bank or credit union to count the charge), but as an immediate ATM withdrawal (which does not count as one of your required monthly transactions.
I was truly hoping I could do the PayPal trick.
I tested it today for the first time, since I got my Visa Check card today.
So, now I need to test iTunes to see if that would work. (Does iTunes process the charge as a point of sale charge?)
If that fails, I guess the only way then to do your required debit card transactions is to buy something outside.
"POS Withdrawal PAYPAL *xxxxx"
when i used it to pay a library fine....
"POS Withdrawal XXX COUNTY LIBRARY"
unless something recently changed the way Paypal processes it, it sure works
I logged into my CU Rewards Checking Account online yet again, and it says: "ATM W/D PayPal Inc. San Jose CA" (and then of course it lists the amount).
My PayPal procedure: I logged into my PayPal account and told PayPal I wanted to send money to someone for goods and I wanted to pay for it using my registered Visa Check card/Debit Card (which is the only payment source I have set up with PayPal).
PayPal put it through and the amount was deducted from my checking account immediately.
After seeing that my checking account online said it was an "ATM W/D," I called my CU customer service. I was told that PayPal can put it through as a withdrawal like from an ATM and that the transaction would not count.
I wish I didn't find this out, since I really loved the idea of buying stuff using PayPal to make my rewards account easier to manage when it comes to the debit charge requirements. (Heck, I was hoping I could just send $1.00 to a relative's PayPal account. How easy would that be?)
"I wanted to pay for it using my registered Visa Check card/Debit Card (which is the only payment source I have set up with PayPal)."
That sounds like the key to your problem. PayPal is using a debit card network to process the transaction, and that's what makes it appear to be an ATM transaction.
Instead, define your debit card to PayPal as a credit card, just like you would do for any true credit card. Then it should be processed like any other credit card, with the resulting credit card transaction type.
OK, so I called PayPal and read all the fine print under their Legal Matters.
By default, when you register a bank debit card as your credit card, PayPal will always process the transaction as an ATM Debit.
You must do this payment processing request change with each transaction. There is no way to set it as a default to use the Visa network and not the ATM Debit.
A small pain in the neck, but easily doable. Just remember to make the change before hitting the Send Payment button. So, always remember to click where it says:
"Visit Funding Sources to learn more about PayPal policies and your payment source rights and remedies, or to change debit card processing options."
P.S. I called my CU and specifically told that PayPal only processes charges as ATM Debits. I was told this by the first rep and her manager. Yet more misinformation given out.
Debit Card W/D: Debit Card
PAYPAL *xxxx CA
For this account, I have been using paypal trick for 6+months, so this defintely works.
The other I account I posted is brand new, so I will check with the bank to see if the account it as POS sale.
In your list of nationally available reward checking accounts, it looks like you missed Coastal Federal Credit Union, on which you reported recently.
They call it "Go Green Checking":
"Go Green Checking is Coastal’s newest Checking account that pays a high dividend yield of 5.01% APY on checking balances up to $50,000. Simply perform a minimum of 12 monthly debit card transactions, and you'll enjoy this great rate. It's that easy! Plus, there are no minimum balance requirements or monthly fees tied to this account.
"Additionally, for every new Go Green Checking account that is opened, Coastal will plant a tree via the Arbor Day Foundation to support the foundation’s Reforestation program, 'Trees to the Forest.' Our contribution will help replace trees lost in fire ravaged forests. Go Green!
"Qualifying debit transactions are as follows:
"Signature – You present your debit card and sign your name to the purchase.
PIN – You swipe your debit card and enter your PIN.
Pinless – You make an online purchase or pay a bill via phone or Internet. Online Bill Pay (c-Pay) transactions do not count toward the 12."
Southland Credit Union still has no cap on their Rewards Checking, but membership is restricted.
It would be so nice if the easier-to-join Credit Unions didn't have a balance cap.
It doesn't sound that easy for out of state residents. I called up the bank today and the CSR told me that I have to go the financial center to sign the documents and also to show my utility bills which cannot be sent by mail. Any suggestions??
Please specify which Reward Checking account you're referring to. Thanks!
My philosophy: If a bank or credit union makes it that difficult for one to give them their money, that bank or CU doesn't deserve their money.
Some banks and CU's make it ridiculously difficult to sign up with them...and for what? So we can give them our money and help their business. I could understand it being difficult if we were trying to take money from them, like as a loan. But to make it so hard sometimes for us to let them hold our money just seems ludicrous.
Now, I understand that banks needs to protect themselves against people that might want to hide money for terrorism, but clearly there are ways to do this, such as with credit checks and with notarized applications and notarized utility bills and notarized copies of ID, etc.
Harry, you can call that bank or CU one more time and ask for a manager and plead your case, saying traveling to the them would be a hardship. Offer to send notarized copies of things, etc. If they still refuse, **** 'em! Hunt for a bank or CU that will be easier to deal with.
Point: be diligent
Here's what an anonymous reader left in the comments of another post:
I just wanted to let you know that Citizens Bank Minnesota no longer accepts out of state funds. They told me that this was because many out of state members were "abusing" the accounts. Perhaps this means that their debit card purchases weren't pricey enough to give the bank adequate compensation.
I do think it's unfair to threaten to close a customer's checking account when the customer is playing by the rules. I know ING Direct received some publicity a few years ago for closing accounts of customers who were too costly for them. So I'm afraid it's probably legal for banks to be able to close accounts even when the customers are following the rules of the account.
1. Received 6.01% for 3 months on both. However, the dream has ended as I noticed the rate go down to 5.01 (probably starting Nov 2008)
2. During a conversation with a CSR, I too, was surprised when asked for details on how I use the account and why there are not a lot of large debit card transactions. Curious to know where that was going, I humored her and gave her a couple of plausible reasons. She did, however say that I might still receive a letter stating something to the effect that my per transcation amounts appeared token and could affect the bonus rate offering. I have since been a little more aggressive in my spending. So far so good.
I understand that the rate offered bank is ostensibly funded, in part, by kickbacks from VISA for debit card transactions but it would leave a better taste in the mouth if they were more upfront about minimum qualifying amounts instead of their current practice.
3. Fund transfers from Paypal appear to meet the Direct Deposit qualification.