TAB Bank Debuts Kasasa Cash Checking, 4.00% APY Up To $50k
Utah-based TAB Bank has recently added a Kasasa Cash Checking (Kasasa Cash) account, which earns 4.00% APY on qualifying balances up to $50k. Qualifying balances over $50k earn 0.25% APY, with non-qualifying balances earning 0.05% APY.
Monthly Qualification Requirements
- Have at least 15 debit card purchases* (minimum $5)
- Have at least one direct deposit, one ACH, or one bill pay transaction
*The fine print on the landing page clearly describes which debit card “activities do not count toward earning account rewards:"
ATM-processed transactions, transfers between accounts, debit card purchases less than $5.00, debit card purchases processed by merchants and received by our bank as ATM transactions, non-retail payment transactions and purchases made with debit cards not issued by our bank.
Kasasa Cash Details
- No minimum opening deposit requirement.
- No monthly maintenance or opening/closing fees.
- Limit of one account per Social Security number.
- Nationwide ATM fees will be reimbursed up to $15 per cycle.
- New accounts will automatically qualify during the account’s first statement cycle.
Kasasa Saver
The Kasasa Saver account linked to the Kasasa Cash earns 1.50% APY on qualifying balances up to $100k. Qualifying balances over $100k earn 0.25% APY, with non-qualifying balances earning 0.05% APY.
Like the Kasasa Cash account, there are no fees associated with the Kasasa Saver account and no minimum opening deposit. There is also a limit of one Kasasa Saver account per Social Security number.
Kasasa Cash
For those not familiar with the Kasasa brand, Kasasa Cash is a type of Reward Checking Account (RCA) developed by the Texas company, Kasasa, Ltd. According to the Kasasa website,
Kasasa: the free checking account that rewards each month for doing things you already do.
By performing certain actions valuable to your bank or credit union, like using your debit card or online banking, your institution makes more money, which they share with you in the form of rewards.
In case you were wondering, “Kasasa” is just a made-up word.
In a world where real-life people are too often taken for granted as account numbers,
we didn’t want to be the next [INSERT GENERIC NAME] checking account.
High Yield Savings
The unique thing about TAB Bank and their Kasasa accounts is that TAB Bank also offers an online High Yield Savings account. Improvements have been made to the High Yield Savings since my last review. It now earns 2.40% APY on all balances of at least $1. There is no minimum opening deposit or monthly service fee.
Hopefully, this will spur other internet banks to offer their own Reward Checking Accounts.
Availability
Headquartered in Ogden, Utah, TAB Bank has been offering its product line on a nationwide basis for several years. In the past year, an online application has been added, which is a distinct improvement over submitting an application by phone, e-mail, or even snail-mail.
The Kasasa Cash account can be opened online, or in person at TAB Bank’s sole branch located on Harrison Boulevard in Ogden.
Bank Overview
TAB Bank has an overall health grade of "B" at DepositAccounts.com, with a Texas Ratio of 16.10% (above average), based on December 31, 2018 data. TAB Bank has an excellent capitalization level (14.73%), the result of holding $739.41 million in assets with $14.73 million in equity. Please refer to our financial overview of TAB Bank (FDIC Certificate # 34781) for more details.
Currently Utah’s 24th largest bank, Tab Bank was established in 1998 as the Transportation Alliance Bank, Inc. by parent company, Flying J Inc. Originally founded to provide financial services to the US and Canadian trucking industry, TAB Bank subsequently expanded to offer custom working-capital solutions to businesses from a variety of industries.
According to a recent Bank Director article,
Most people assume that fintech companies are out to take business away from banks, but what if the opposite is true?
What if, instead of being a threat, fintech companies actually open up new opportunities for banks?
“We came to the conclusion that we would build our strategy around how we think the market will look in two to five years, not how it behaves today,” says Curt Queyrouze, president of TAB. “What we determined was that once consumers try a digital interaction, they stay in that lane.”
How the Kasasa Cash Account Compares
As you can imagine, there aren’t that many High Yield Reward Checking Accounts with maximum qualifying balances of at least $50k. For this comparison, I've chosen those accounts tracked by DepositAccounts.com that are nationally available and have maximum qualifying balances of at least $25k. TAB Bank’s Kasasa Cash APY currently equals that of Orion Federal Credit Union’s Premium Checking APY, but the $50k qualifying balance gives TAB Bank a definite competitive edge.
The above rates are accurate as of 4/22/2019.
To look for the best Reward Checking Account rates, both nationwide and state specific, please refer to our High Yield Reward Checking Account Rates Table page.
In other words, only material things and services count as purchases and nothing else and those purchases must be transactions as credit (signature based) not as ATM or debit card where you enter your pin number.
I think its banking terminology.
"Retail payments usually involve transactions between two consumers, between consumers and businesses, or between two businesses" - the FFIEC IT Examination Handbook
(This assumes you'll deposit and maintain a balance of exactly $50,000.)
TAB Checking:
$50,000 @ 4.0% for 1 year earns $2000 (ignoring compounding because the interest rate changes above 50k and withdrawing anything above $50k each month)
- Fed income tax (22%) = $1560 (YMMV)
Other Savings (e.g. CIT Bank):
$50,000 @ 2.4% for 1 year earns $1214 (compounded daily)
- Fed income tax (22%) = $947 (YMMV)
$1560 - $947 = $613 additional income over the savings account
(State income tax reduces this further if applicable.)
$613 / 180 required debit card transactions per year: $3.41 earned for each transaction
Assuming transactions average $7 each, that's like getting almost 50% cash back if you do exactly 15 transactions per month. (Obviously an average closer to $5 is better.)
Compared to rewards credit card:
If your average transaction is $7, x 180 transactions/year, that's $1260 spent.
- a 2% rewards card earns $25.20 for the year
- a 4% rewards card earns $50.40 for the year
Basically, if you have $50k you want to keep in a checking or savings account, and it won't be a problem doing 15 small card transactions a month, this is definitely a better deal than parking your money in a high interest savings account and using a rewards card for those small transactions.
One piece of information I can't find is whether TAB has a foreign transaction fee on debit card transactions. I'm assuming they do, but if someone does sign up and finds that info in the terms page, please report back.
I spend over $1600 a month on food, clothing, transportation and misc expenses, I use credit card that pays me back on average month of about 2% back and that makes it income tax free for about $400/year and the $50K CD makes me 3.5%. I make more money than your calculations and suggestions say, after the income tax is included and I do not have to move my finger to make minimum purchases and worry about meeting the obligations and logging in to do ACH every month.
By the way, many bill payments by reward credit cards make me another $300/year tax free.
However, pgroove_fan's provided some crucial info in a comment below [ https://www.depositaccounts.com/banks/tab-bank/offers/#30 ] which includes text from their terms and conditions suggesting that they would heavily frown on only using the debit card for small transactions and that they could nullify the 4% rate if you seemed like you were only using the debit card to score that rate. This makes it sound likely that my "math" above might raise a red flag, even if it was organic spending, and thus enough for me to pass on it.
Good deal! Or, you can do 2 Orion accounts = $60K at 4% with 16 Credit card transactions per month.
Because I use prepaid gift cards bought at a discount for most of my REAL retail spending I would find it very difficult to find $75 a month to be able to spend. I mean right now, I could easily do it for my Geico payment but thats once every 6 months. But I would have to forgo using prepaid cards in order to use this account. Because of that, Im probably going to pass on it.
I am still considering opening an Orien though.
I currently have 2 at Heritage Bank and I knock them out at the first of the month from small gas station transactions and maybe a dollar store purchase if I happen to need something.
If not for all of that this 4% would certainly be worthwhile as your math shows.
And it might be something I revisit in the future.
Grocery shopping-debit card; eating out-debit card; online shopping-debit card; coffee at Starbucks-debit card, etc etc. It's really not that hard to do.
I have 3 RCA accounts and usually I end up making more POS purchases in a month than I need to meet the requirements of my 3 RCAs.
When I buy my grocery, gas etc, I will try to make this work. I will ask two bill at grocery, and maybe rather than filling up full tank of gas, I will fill up 3/4.
No idea if I can make it work, will try, but if I cannot, then will close the account. They have indicated no fees to close account anyways.
it sounds like you have a good plan for yourself. And you're right, with the fact there are no fees if one doesn't hit the requirements, you can always close the account.
As I indicated, if I can make it work, good, else I'll close account, and move on.
If, by chance, you happen to call TAB because of another issue or question related to your brand new account, if it's easy, perhaps you could ask the rep to clarify exactly what "non-retail payment transactions" mean. Or to put it simply, is a payment to a utility company considered a non-retail transaction by TAB? Thanks.
I spoke with a gentleman at TAB a few minutes ago who was uncommonly helpful and polite.
Warning to Orion FCU: you're about to lose half or more of your RCA deposits.
"Account approval, conditions, qualifications, limits,
timeframes, enrollments, log-ons and other requirements apply.
No minimum deposit is required to open the Kasasa Cash
account. No minimum deposit is required to open the Kasasa
Saver account. Enrollment in E-Statements is a condition of
these accounts.
*****Limit of 1 account per Social Security Number
(SSN). *****
There are no recurring monthly maintenance charges or
fees to open or close these accounts. These accounts are not
to be used for commercial purposes. If the accounts are closed,
you will forfeit any rewards that have not been credited to your
accounts. A Kasasa Cash account is required to have a Kasasa
Saver account. If, for whatever reason the Kasasa Saver
portion of your account is closed, your account will
automatically be converted to the associated standalone
Kasasa Cash account and that account's terms and conditions
articulated within their specific disclosure will apply. A linked
Kasasa Saver account is required for automatic savings."
Asterisks mine.
Note that there have been cases reported on this website where some folks got hard pulls and some didn't, for the same offer.
For myself, I'm squared away with RCAs for the moment, but look forward to reading reviews of anyone here on DA that goes for this offer.
The naysayers and system-gamers will likely have much to say about the following extract from the document.
"Commensurate with the spending activities identified above, we expect the account's debit card to be used frequently throughout each month and for transaction amounts to reflect a wide dollar range. Small debit card transactions conducted on the same day at a single merchant and/or multiple transactions made during a condensed time period particularly near the end of a Monthly Qualification Cycle are not considered normal, day-to-day spending behavior. These types of transactions appear to be conducted with the sole purpose of qualifying for the account's rewards and thus will be deemed inappropriate transactions and will not count toward earning the account's rewards. TAB Bank reserves the right to determine if the account is being maintained for a purpose other than day-to-day, primary use. Accountholders who persist in making debit card transactions in a calculated and limited fashion in order to meet their monthly qualifications may have their accounts converted to a different checking account or closed altogether. We also reserve the right to convert the account to a different checking account if the account does not have consistent active use over 3 consecutive Statement Cycles"
.. Waiting for something else to come along ....
Also, on their "We also reserve the right to convert the account to a different checking account if the account does not have consistent active use over 3 consecutive Statement Cycles": This would be another very easy thing to program into their software which can easily monitor/notify.
But that's not the issue - the issue is this rather mushy, non-quantitative clause that p_groove identified above (the text starting with "Commensurate with the spending activities identified above,..." . You'll notice, nearly everything in that clause is subjective. There are not many ways to program an algorithm to flag any of that, UNLESS the bank depends on hidden and higher limits (what you are perhaps calling "parameters") for either the number of transactions, their minimum amount (or some average), or perhaps the number of different merchants or retailers where the card is used each month.
That's why I posted earlier that a more straightforward and honest way for this bank to make it's wishes known to potential customers, would be to simply state these higher limits, or parameters. If, for example, they really expect 20 transactions per month at an average of $15, instead of 15 at $5 or above - then they should simply say so, in clear English, and eliminate all the fuzziness.
Regarding ways to automatically program on what to possibly look for regarding possible attempted "gaming of the system": Here's just one example. It's well known that those trying to game the system will simply do multiple Amazon Gift Card reloads for minimum amounts, or multiple small payments to a utility such as Cox Communications or T-Mobile. The software can simply identify if there are multiple payments to the same "merchant" for less than $10 as one example and then go ahead and send a notice to an employee to take a very quick closer look.
The reason the RCA banks had to start including that kind of language is because of some of the people here who boast about knocking out their RCA requirements through repetitive $1 or $3 gasoline purchases and gaming the system stuff like that.
If you simply use the Kasasa account and its debit card for a normal person's routine monthly spending -- and use the card instead of paying cash for various things -- you'll more than likely meet the requirements naturally and not have to worry about getting caught trying to cheat the RCA system.
I disagree that meeting the requirements naturally is "more than likely", as it's subjective to one's spending habits. I know my own monthly spending habits would be a struggle to meet the 15 required transactions and that's assuming all my transactions would be counted as "non-retail payment transactions" (and I pretty sure not all of them would).
You see, the TAB account looked a lot more attractive on the surface: No hard pull, a $50K vs $30K balance payout, no $500 minimum deposit per month, and no monthly fee if you don't make the requirements for the month.
But that's as it may be. Another way for the FIs to "defend themselves", as you put it, would be for them to simply and explicitly define, in plain language, what they are looking for. For example, they could easily have stated in a document "each month we require 20 transactions, each of at least $25.00". That would have defined the matter, and left no room for uncertainty.
Also welcome suggestions from anyone else who has been able to accomplish this.
Because debit transactions require pin numbers and retailers do not know your pin number and cannot enter it after the fact even if they did.
https://www.depositaccounts.com/community/misc/21101-walmart-allow-debit-card-credit-card.html
I don't know if WalMart is still doing this currently, or not.
But maybe I'm missing something. Which CD offer do you want so badly? Looks to me like TAB's CD rates are all a bit low for any "potential new" customer to care about.