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Updates to My Nationwide Reward Checking Accounts List - Update


I've added three new banks to my list of nationwide reward checking accounts. These banks now allow people from any state to apply online through CheckingFinder.com. If you do a search using CheckingFinder with any zip code, these banks should now show up. I posted on these banks last year, and I've just updated those posts. Here are the links to these posts with the rates as of 3/18/2009:
Unfortunately, two banks were removed from the nationwide list. One was Bank of Ripley in Tennessee which had been the rate leader of the nationwide list with a 5.26% APY (see post). The other one was Keystone Bank in Alabama which was offering a 5.15% APY (see post). It appears you can still apply online for these accounts at CheckingFinder, but you have to live in the state.

It's starting to be common for banks to change their policy on availability of these accounts. This is the same thing that happened in January when another former nationwide rate leader, Bank of Blue Valley, ended the nationwide availability of its reward checking account.

It should be noted that many of the banks offering these reward checking accounts are small so they can quickly become overwhelmed with deposits. Also, as I described in my post on the math behind reward checking, I think these banks find out that they get a lot more rate chasers when they offer these accounts nationwide. Instead of reducing availability, banks have also cut the maximum balance that qualifies for the top rate. We just saw the popular Redneck Bank and its sister banks cut their balance cap from $25K to $10K (see post).

Just like the online savings accounts, reward checking rates are also being cut. Nevertheless, on average, reward checking account rates continue to be much higher than internet savings account rates. The average APY for the 355 reward checking accounts on my list is 4.20% (see stats).

A few banks have been offering rate guarantees on their reward checking accounts. Artisan's Bank in Delaware is guaranteeing 4.01% APY through this year (see post), and Bank2 in Oklahoma is guaranteeing 5.01% APY through the year (see post). Bank2 is also offering the account nationwide, but remember that it's a small bank, and as we've seen, small banks often change their policies. So even though the rate may remain at 5.01%, the maximum balance could be cut.

Reward Checking Account References:
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Dude   |     |   Comment #1
Any reward checking with no direct deposit requirements?
Anonymous   |     |   Comment #2
Dude - many of the accts require either DD *or* an automatic withdrawal, so if you can do an ACH withdrawal (to pay your cable bill or something like that) you wouldn't need DD.
Anonymous   |     |   Comment #3
Thanks so much for all your hard work putting this list together! You rock and my bank account thanks you every month when that interest is deposited.
marc   |     |   Comment #4
BTW, for those of us using the nice countrywide ACH system to fulfill the DD/ACH in/out requirement of Reward Checking accounts, I heard this might shut down soon from my sources (former workers there.) Remember though, not all banks may count ACHs in a direct deposit requirement.

I still check my RC bank website everyday and cannot believe every day when I see it's remained 5%.