Update on Jeff Davis Bank's Reward Checking and Savings Accounts
It has been almost 3 years since I first reviewed the reward checking account at Jeff Davis Bank. Both the rate and the balance cap have gone down since then, but it remains fairly competitive. The account pays 4.01% APY on balances up to $15K as of 1/21/2011. The monthly requirements to qualify for the rate are pretty typical: 1) 10 debit card purchases, 2) one direct deposit or ACH payment, 3) access online banking, 4) receive e-statements. As is common with reward checking, there are no monthly fees regardless of meeting the requirements.
Another change that the bank has made is to convert the account to the Kasasa brand, and the reward checking is now called Kasasa Cash. Another Kasasa product offered by Jeff Davis Bank is Kasasa Tunes for those who prefer iTunes rewards instead of high interest rate. If you're mainly concerned with yield, Jeff Davis Bank's Kasasa Saver is a nice addition to the Kasasa Cash account. It currently pays 2.00% APY on balances up to $25K if you meet the Kasasa Cash monthly requirements. So if you have a $40K balance with $15K in the checking and $25K in the savings account, your average yield would be around 2.75%.
Online Application
Update 1/28/2011: At the bottom of the Kasasa application page, it now states "To open an account at Jeff Davis Bank you must reside within our service area of Southeast Texas and Louisiana."
There's an online application link at the bank's Kasasa Cash page which takes you to Kasasa.com. The first page of the application currently accepts all zip codes so the account is available nationwide. I also confirmed this with the bank. Please note that banks often change the availability of these accounts. So if you see that the application doesn't accept your zip code, they might have changed their policy. After you apply online, I was told you'll be instructed to mail in copies of your driver's license, social security card and a bill that has your address.
Hopefully, we'll see more nationally available reward checking accounts, but with news like we had yesterday, it might be more likely that we'll see fewer. As I mentioned in the discussion forum, Danversbank is being acquired by People's United Bank. It's too early to know what will happen to Danversbank's reward checking account (one of the best reward checking accounts available nationwide), but I'm not optimistic based on People's United's history.
Other High-Yield Reward Checking Accounts
To find reward checking accounts in your state or to find those available nationwide, please refer to the reward checking section of DepositAccounts.com.
They have electronic bill pay, but it's not free. From their website:
Bill Pay Fees
The fee for using Bill Pay is $4.00 per month for up to 15 transactions and $0.40 for each additional transaction. Your account will be charged the scheduled fee monthly*.*The Bill Pay fee will be charged to your account on the last business day of the month. This fee will be charged each month regardless of your bill payment scheduling activity. The Bill Pay fee will continue even if you do not use Bill Pay once you have established the service. If you decide to stop using the service, you must notify us to cancel your bill payment monthly fee via email or see the Communicating With Us and Email section above. The Bill Pay fee is accessed on a per user basis. In regards to joint accounts, each registered Bill Pay user will be charged the monthly fee.
This excerpt was taken from https://www.kasasa.com/jeffdavisbank/cash/provider/jeffdavisbank/open/introduction:
"To open an account at Jeff Davis Bank you must reside within our service area of Texas and Louisiana. Jeff Davis Bank is not required to open accounts outside of our service area."
A second Email yesterday said that he would receive his debit card and checks in 14 business days (roughly 2/11). After noticing that the next cycle ends 2/22 (the day before the fourth Wednesday) he emailed the CSR who had opened the account and politely asked if that cycle could be made eligible for the "first cycle courtesy pass". The reply he received this morning: "Unfortunately our system is set up to only allow the first cycle, with no criteria met, with the higher interest rate earned. Anytime a new Kasasa Account is opened the first month is automatically pro-rated for the remainder of the month. I apologize for the inconvenience, however all Kasasa Accounts are processed the same."
Some institutions offer to do a "forced qualify" in such cases, but that is apparently not an option.
Not the most auspicious start....
The obvious next question is how long do they stay at 4%?
They have had their current rate since feb of 2010. They may change it tomorrow for all i know, but this doesn't seem to be a teaser rate. So for those people complaining about not getting paid enough interest because you started the monthly cycle to late, this account has been around for a year. Don't blame the bank for its policies, like everything, there has to be a hard cut-off for everyone.
Has anyone outside of that area been able to open an account after the restriction was placed? If so, tell us how! : )
So... unless we want to relocate we're out of luck as far as JD Bank goes... too bad, as they not only seem to be quite large compared to some of the banks on the rewards checking charts, they also seem to be doing pretty well financially.
Oh well. I think I'm going with Lake Michigan Credit Union. Look them up on this site; there's a way to qualify wherever in the country you live.
"... The interest rates will remain unchanged on both the Kasasa Cash and Saver accounts; however, we must lower the interest earning caps on both of those accounts. The cap for maximum interest in the Kasasa Cash account will be lowered to $10,000 and the Kasasa Saver cap will be lowered to $15,000. This change will take effect on your statement cycle beginning March 24, 2011.
New Kasasa Cash structure
4.01% APY for balances at or below $10,000 that qualify
0.51% APY for balances above $10,000 that qualify
0.10% APY on all balances that do not qualify
New Kasasa Saver structure
2.00% APY for balances at or below $15,000 that qualify
0.51% APY for balances above $15,000 that qualify
0.10% APY on all balances that do not qualify"
Currently, an accountholder who funded the RCA and Saver accounts fully would receive annual interest of approximately $1100. Under this new structure, an accountholder who funded the same accounts fully would receive annual interest of approximately $701, a drop of 36%.
However, I appreciate that they notified accountholders of the change with a fair amount of advance notice. Recently, other institutions have made changes retroactive (Pelican State CU), or have served notice to accountholders by posting the changes on their website merely a couple of days ahead of the change (Beacon) and that served as the only notification (acceptable according to T&C but hardly cricket).