With a 4.30% APY for balances up to $25K, Royal Banks of Missouri had the highest rate for a nationwide reward checking account since Bank of the Sierra cut its reward checking rate in early December. It looks like they are no longer offering this account nationwide. A reader just noticed that it's no longer showing up for most zip codes at CheckingFinder. The bank still has the link to the CheckingFinder application at its reward checking page. I gave this a try, and sure enough, it didn't accept my Texas zip code.
This coincides with another change the Royal Banks of Missouri is implementing. The number of debit card purchases required per month is going up from 10 to 15 starting on March 9, 2010. At least they're maintaining the 4.30% APY, and they're giving plenty of notice of this debit card change (see review).
It's clear that banks are having a difficult time maintaining high rates on their reward checking accounts. When most online savings accounts pay less than 1.50%, it's probably too much to expect for reward checking accounts to be able to pay over 4%. The money banks get from debit card usage can only help so much.
In the last year we've seen many banks reduce the nationwide availability of their reward checking accounts. Nationwide reward checking accounts probably attract more serious savers who will keep close to the balance cap and won't make large debit card purchases. Banks that offer it only to their local market area will likely get more of the average Joes who will keep smaller balances with higher debit card use, and they will probably be more likely to overdraft which is a high profit area for banks.
There are still several banks offering reward checking accounts with rates around 4% that are available nationwide. Most have a $25K balance cap, but there is one with a $50K cap (I just confirmed it's still nationwide). The full list of reward checking accounts is available at the reward checking section of DepositAccounts. Note, the US map indicates that the account is nationally available. We'll be changing the status of Royal Banks soon. Unlike rates, availability can't be easily checked by automatic means.
Thanks to the reader who noted this change at Royal Banks.