High-Yield Reward Checking Account w/o Balance Cap at City Bank - Texas Only

City Bank in Texas continues to offer an interesting version of a reward checking account. The rate is lower than many reward checking accounts (2.75% APY as of 9/15/2010) and it has more requirements than typical (20 debit card purchases a month), but it has one nice feature: no balance cap. The entire balance can qualify for the top rate.

For those who don't like to keep a large amount in a checking account, they have the Reward Plus package which provides a reserve account with the reward checking account. When you meet the monthly requirements, the top rate applies too both accounts. You can also open multiple reserve accounts. I'm surprised we don't see more banks offer this type of package.

Here's a summary of the monthly requirements:

• 20 debit card purchases
• 4 ACH debits or credits
• 1 online bill payment
• Access your online account
• Receive electronic statements

In addition to the top rate, City Bank also refunds ATM fees nationwide if you meet these requirements. If you don't meet these requirements, the rate falls to 0.16%. If these requirements are too much for you, they have another reward checking account that has fewer requirements, but the top yield is only 1.00% APY as of 9/15/2010. At that rate, there's no advantage of this account over the internet checking and savings accounts.

I first reported on these accounts in this June 2008 post.

Online Application, but Texas Only

The bank has an online application, however, the first page of the application states that "At this time we are unable to open accounts for non-Texas residents."

Branches are located in several Texas cities including Lubbock, Dallas, El Paso and Plano.

The bank's overall health score is 3 out of 5 with a Texas Ratio of 39.59% (above average) based on 6/30/2010 data. Please refer to our financial overview of City Bank for more details. The bank has been a FDIC member since 1984 (FDIC Certificate # 25103).

Different Than City National Bank

This bank should not be confused with City National Bank in Taylor, Texas. City National Bank also has a no-cap reward checking account. However, City National Bank's rates have plummeted over the last year, and it's yield is now only 1.05% APY. With City Bank limiting accounts to Texas and with their additional requirements, they may have a better chance at keeping their rates high.

Other High-Yield Reward Checking Accounts

I should have included City Bank in my list of the best reward checking accounts in Texas. The rate may not be the best, but it's rare to find a reward checking account without a balance cap.

To find reward checking accounts in your state or to find those available nationwide, please refer to the reward checking section of DepositAccounts.com.