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POSTED ON BY Ken Tumin
Wall Street Journal came out with an article yesterday on reward checking accounts. With rates on CDs and savings account falling like a rock, the 6% yields offered by many reward checking accounts are attracting attention.
The article has a few new tidbits of info. It mentioned that Bancvue (the main provider of reward checking to financial institutions) has about 400 banks and credit unions with these accounts. This up from 300 since I last saw this stat, so Bancvue must be having success growing reward checking. I've only reported on about 100 reward checking accounts in the last year. So there are many more reward checking accounts to report.
The article repeated Bancvue's statistic that these accounts are on average twice as profitable to those financial institutions as a free checking account. It doesn't discuss if these reward checking accounts can maintain rates significantly higher than online savings account rates.
New Nationwide Reward Checking Accounts
The article mentioned 3 banks offering these reward checking accounts nationwide. The first one mentioned was State Bank of Toledo which I first reported on in June 2007. The second one is a reward checking that I just mentioned last week. It's at Southern Community Bank & Trust, and it offers a 6.00% APY for balances up to $25K. When I contacted the bank last week, I was told that they require a branch visit. I just sent the bank a message to see if the WSJ article made a mistake. The third bank was new to me. I just did a post on this. It's The Bank of Fayetteville. The yield is only 5.01% APY but the cap is $50K, so it's similar to The State Bank of Toledo which now has a 5.01% APY and $70K cap. I've sent a message to this bank to confirm that it's really available nationwide.
I have an updated list of reward checking accounts available nationwide in my weekly summary.
For more info on reward checking accounts, please refer to the following:
Thanks to the reader who sent me an email on this article.
The article has a few new tidbits of info. It mentioned that Bancvue (the main provider of reward checking to financial institutions) has about 400 banks and credit unions with these accounts. This up from 300 since I last saw this stat, so Bancvue must be having success growing reward checking. I've only reported on about 100 reward checking accounts in the last year. So there are many more reward checking accounts to report.
The article repeated Bancvue's statistic that these accounts are on average twice as profitable to those financial institutions as a free checking account. It doesn't discuss if these reward checking accounts can maintain rates significantly higher than online savings account rates.
New Nationwide Reward Checking Accounts
The article mentioned 3 banks offering these reward checking accounts nationwide. The first one mentioned was State Bank of Toledo which I first reported on in June 2007. The second one is a reward checking that I just mentioned last week. It's at Southern Community Bank & Trust, and it offers a 6.00% APY for balances up to $25K. When I contacted the bank last week, I was told that they require a branch visit. I just sent the bank a message to see if the WSJ article made a mistake. The third bank was new to me. I just did a post on this. It's The Bank of Fayetteville. The yield is only 5.01% APY but the cap is $50K, so it's similar to The State Bank of Toledo which now has a 5.01% APY and $70K cap. I've sent a message to this bank to confirm that it's really available nationwide.
I have an updated list of reward checking accounts available nationwide in my weekly summary.
For more info on reward checking accounts, please refer to the following:
- Directory of High Yield Reward Checking Accounts
- History of Reward Checking Accounts
- Bankrate article and review of Reward Checking
- Reward Checking Accounts around the nation
Thanks to the reader who sent me an email on this article.
I put in $100,000 in my Rewards Checking, and I will add another $100,000 as soon as my CD matures in 7 weeks, assuming the conditions are the same.
Plus, my CU doesn't require an automatic debit or direct deposit, as most do. My CU requires at least one manual online bill pay or manual ACH transfer or deposit, of any amount. (Everyone has at least one bill they could pay using online bill pay. Or, at the very least, I can send an ACH transfer to my linked checking account at another bank. Even for just a dollar.)
I need to do 10 debit/check card transactions per month. (I can log into my account online and it tells me how many I have done so far for the month, to see if I am successful.) I will try doing it via PayPal, with small amounts, sending money to a friend or relative, telling PayPal to charge it to my Visa Check Card, to see if this actually works. It should. If it doesn't, maybe I will just do the iTunes songs.
Don't be very ****y since
everyone is not so rich.
Even $25k is good enough for most people. 1% differential on $25000 is $250.
BTW, MCUU is still offering 5.26% reward checking if you qualify.
I am very sorry.
You are right.
I really meant to express a passionate point rather than imply that I am rich (which I am not).
I get angry over the fact that most of these banks and credit unions are placing caps on these rewards checking accounts when they are asking for a lot of work and responsibility on the part of the customer, where the customer must do 10 to 12 debit transactions per month AND must do direct deposit or automatic debit, etc.
I personally feel that a cap of $25,000 makes these accounts far less attractive.
And since some banks can offer these accounts with no cap, why can't all the banks offer no cap?
People will respond that if a bank allowed $100K or more for these accounts, the bank might lose money. So, if true, the CU I am using will be losing money since they allow any amount, which will mean that they will have to eventually institute a cap, and then I will have to transfer my money out.
It is so nice to see that there still are sincere people out there using the internet and know how to apologize when sometimes their comments may be taken the wrong way.
People like yourself really help to keep this site civil. Thank you
And thanks again to Banking Guy for this site and keeping us savers so well informed.
I promise I have learned my lesson and will not make that mistake again.
I would also like to second your expression of appreciation to Banking Guy for this site.
They may be only "fishing" new customers.. and after few months.. move to the standard APY earnings.
does anybody know if those banks account have some high closing fee?
Thanks,
Davide
Most all of these accounts have no minimum balance requirements and no monthly fees. If you don't meet the requirements, you just won't get the high yield and the ATM fee refunds. So you can always withdraw your money without having to close the account.