High-Yield Reward Checking Account at an Iowa Bank (State Bank of Toledo)

Update 5/16/11: The top rate has fallen to 1.51% APY. See bottom of post for the rate history.

State Bank of Toledo is offering a reward checking account called Hometown Reward Checking. It offers 1.51% APY for balances up to $25,000 (0.50% for above) and up to $25 of ATM fee refunds per month if you meet the typical reward checking requirements: 1) 10 check card transactions per month, 2) one direct deposit or ACH auto debit per month, and 3) receive electronic statements. If you don't meet these requirements, the rate falls to 0.15% APY. There are no monthly service charges regardless of meeting these requirements. It requires a minimum opening deposit of $100, but no there's no minimum balance requirement.

You can apply online without a branch visit. After you submit the application online, they'll send you a signature card that must be signed and notarized. I was also told you can be in any state to apply.

NOTE: A reader advised me that you must contact State Bank of Toledo if you want to wire funds. One cannot just use State Bank of Toledo's routing number. They have a correspondence bank (a banker's bank) in Madison, Wisconsin. (1/3/08)

The bank is located in Toledo, Iowa which is between Des Moines and Cedar Rapids. It has been FDIC insured since 1934 (FDIC Certificate # 4514). The bank has a 3 out of 5 star rating (performing) at Bankrate.com based on 12/31/06 financial data.

For other reward checking accounts in other parts of the country, please see my best checking account post.

Rate History:

• 05/16/11: 1.51% APY up to $25K; 0.50% over; 0.15% base
• 12/30/10: 2.01% APY up to $25K
• 01/19/10: 2.51% APY up to $25K; 1.00% over; 0.25% base
• 09/09/09: 2.51% APY
• 10/15/08: 3.01% APY
• 03/21/08: 4.01% APY
• 12/14/07: 5.01% APY for up to $70K (Please see this post for more details)
• 06/21/07: 6.01% APY for all balances