Update 3/25/15: The guarantee period has been extended to the start of 2016.
Last November Consumers Credit Union (CCU) made a very nice change to its Free Reward Checking Account. It increased the balance that qualifies for the top rates from $10K to $20K. Also, the credit union is guaranteeing the top rates until August 2015. Thanks to DA members for highlighting these changes in the DA forum. I just wanted to remind everyone of this great deal.
CCU’s Free Reward Checking Account is a great deal, but it has become a little complicated. Those changes that complicated the account took effect early last year. Instead of just one reward rate, there are now three reward rates that depend on how many monthly requirements have been met. Below is a summary of the rates, balance caps and the monthly requirements that took effect in November: This summary is based on the credit union’s Free Rewards Checking page as of 1/7/2015:
Qualifying for 5.09% APY for up to $20,000 (rate guaranteed until August 2015):
- Meet the requirements to earn 3.09% APY
- Spend $1,000 or more in CCU VISA purchase transactions, regardless number of purchases
Qualifying for 4.09% APY for up to $20,000 (rate guaranteed until August 2015):
- Meet the requirements to earn 3.09% APY
- Complete 12 CCU VISA Credit Card purchase transactions, No minimum purchase requirement.
Qualifying for 3.09% APY for up to $10,000 (rate guaranteed until August 2015):
- 12 signature-based debit card purchases
- One direct deposit OR one ACH debit OR online bill pay
- Access online banking
- Receive electronic statements
When you meet all of the basic service requirements for the calendar month, ATM fees incurred during the month will be refunded to you.
$50/$50 Rewards Checking Referral
Consumers Credit Union is offering a nice referral bonus. Both the existing member and the new member can each earn $50. Below is a summary of the referral program. Please refer to this CCU page for the full details:
- Refer a new Member to CCU
- When your referral opens a CCU Rewards Checking account, you're both eligible for the referral bonus
- If the new Member meets their Rewards Checking requirements (at any level) for the first two full calendar months of Membership, CCU will deposit $50 in your account and $50 in theirs, too.
- No limit on the number of referrals
In my opinion, the 4.09% level is the best deal. You still get the $20K balance cap but you don’t have to spend $1,000 per month with your CCU credit card. You will just have to make 12 credit card purchases in addition to 12 debit card purchases each month. That’s a lot of card purchases, but you’re rewarded with 1% extra APY and a balance cap that’s $20K instead of $10K. The 4.09% APY for balances up to $20K is much better than any other nationally available reward checking account. The second best is 3.00% APY for balances up to $20K at INOVA FCU, and the third best is 3.00% APY for balances up to $15K at Lake Michigan Credit Union.
Is the 5.09% level worth it? If you spend $1,000 per month to qualify for an extra 1% on a $20K balance, you’ll receive an extra $16.67 per month in interest. Now let’s compare that to using a 2% cashback credit card. If you made $1,000 in purchases using a 2% cashback credit card, you would earn $20 per month. Credit card cashback rebates are typically better than earning higher interest due to taxes. Nevertheless, the advantage of the 5.09% level is comparable to a cashback credit card. So for simplicity, you may want to consider meeting the 5.09% requirements if you can easily spend $1,000 per month.
I was a little concerned about the rate guarantee. CCU’s webpage makes it look like they’re only guaranteeing the 5.09% APY. However, I did an online chat with a CSR, and the CSR said that "all three tiers are guaranteed until August."
CCU’s Free Rewards Checking History
Consumers Credit Union's reward checking account has a long history. I first reported on this account over six years ago on August 2007. At that time it was paying 6.01% APY for balances up to $25K. Both the rate and balance cap went down. First the balance fell to $10K, and then from 2012 until March 2013, the balance cap was only $5K. That low $5K balance cap was a deal killer for most savers. I’m glad to see the higher balance caps, and I hope the $20K cap will remain.
Easy Credit Union Membership
The credit union continues to make it easy for anyone to join. According to its membership page:
Membership follows a simple, two-step process: Pay a one-time, non-refundable $5 fee to our sponsor, the Consumers Cooperative Association, and then deposit and maintain a minimum $5 in your Membership Share/Savings Account.
There's an online application. It appears to allow you to apply for both the association membership and the credit union membership at the same time. When you select the option "I am a new Consumers Credit Union Member" in the first page of the application, it will display the following:
All credit unions have a common bond and their members need to be associated with it in order to join the credit union. At Consumers Credit Union (CCU), our common bond is the Consumers Cooperative Association (CCA). You join CCA by paying a one-time fee of $5.00.
Credit Union Overview
Consumers Credit Union branches are located in the Illinois cities of Gurnee, Mundelein, Round Lake Beach, Gurnee, Volo and Waukegan. Consumers Credit Union is part of the CU Service Centers network which allows you to perform many banking transactions at any credit union in the nation that’s part of the network.
The credit union has an overall health grade at DepositAccounts.com of an "A" with a Texas Ratio of 4.38% (excellent) based on September, 30 2014 data. Please refer to our financial overview of Consumers Credit Union for more details. The credit union is federally insured by the NCUA (Charter # 68588).
Other Reward Checking Accounts
To find reward checking accounts in your area or that are available nationwide, please refer to our reward checking account table. Be sure to select the deposit amount above the table to sort the checking accounts based on your desired size of the balance cap.