Non-Reward Checking Account with Rates up to 3.12% at F&M Bank - CA Only

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F&M Bank is offering a checking account called SkyBlue Checking. It's a non-reward type of checking account with a top rate of 3.12% APY as of 4/23/09. However, to earn this top rate, you must have a balance of $50,000. The APY drops as the balance goes below or above $50K. This is due to the following rate tiers as of 4/23/09:
  • 1.00% for balances up to $5,000 and for portions of the balance below $5,000
  • 3.30% on portion of the balance from $5,000 to $50,000 (APY ranges from 1% to 3.12%)
  • 2.30% on portion of the balance above $50,000 (APY ranges from 3.12% to 2.36%)
So for a $50K balance, the first $5K earns 1% and the $45K earns 3.30% which gives you a blended rate of 3.12% APY. So you can see if you only have a $10K balance, the blended rate will be 2.15% (half way between 1% and 3.30%).

Unlike a reward checking account, this does not require debit card usage or direct deposits. It has no monthly service charges. A $50 minimum opening balance is required. Only one account allowed per household.

The account can only be opened online. However, it doesn't seem to be a nationwide deal. In the application it states the following: "All accounts with F&M Bank should be opened by customers that live or work within our service area." After the account is opened, customers may bank in any of their branch locations at no additional cost.

Branches are located through out California's Great Central Valley includin the cities of Sacramento, Lodi, Stockton and Turlock.

The bank's ratings for safety and soundness are strong: 5 stars (superior) at BauerFinancial and 5 stars (superior) at Bankrate.com. Both ratings are based on 12/31/08 financial data. Such high ratings are rare especially for a California bank. The bank has been FDIC insured since 1934 (FDIC Certificate # 1331).

Thanks to the reader who emailed me info on this account.
Related Pages: checking account



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