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POSTED ON BY Ken Tumin
I just added a new reward checking account to my list of nationwide accounts. It's offered by Community National Bank and it's paying 4.51% APY on balances up to $25K as of 7/05/09. I first posted on it last month. I just learned that it's available nationwide at CheckingFinder.com. For more details of this account, refer to my account review.
As we've learned this year, small banks that offer competitive reward checking accounts nationwide often don't continue this for too long. The latest example of this is at First Arkansas Bank & Trust. It has been offering 4.44% APY on balances up to $50K since February 2008 (see review). It had been available nationwide, but recently they've started excluding California residents. I'm not sure why they chose California, but I wouldn't be surprised if they add other states.
This California restriction complicates my reward checking tables. I currently can't handle almost-nationwide accounts. I still have it in my nationwide list, but I've added a note of this restriction at the top of the account review.
Rejected Due to ChexSystems Inquiries
Being rejected due to your location isn't the only reason for being rejected these days. More people are being rejected for having too many recent ChexSystems inquiries. When you apply for an account at many banks, they will do a ChexSystems inquiry to ensure that you haven't abused accounts at other banks (such as unpaid fees). However, many not only look for abuses, but they also look at the number of recent ChexSystems inquiries (MyMoneyBlog has a good review of ChexSystems and how you can get your report for free.)
I was told by a FABaT customer service rep that they will reject applicants with more than 4 ChexSystems inquires in the last 6 months.
With banks slashing rates, people are being forced to find new banks if they want to earn a decent rate of return. So this use of ChexSystems is especially tough on savers these days.
Reward Checking Account References:
As we've learned this year, small banks that offer competitive reward checking accounts nationwide often don't continue this for too long. The latest example of this is at First Arkansas Bank & Trust. It has been offering 4.44% APY on balances up to $50K since February 2008 (see review). It had been available nationwide, but recently they've started excluding California residents. I'm not sure why they chose California, but I wouldn't be surprised if they add other states.
This California restriction complicates my reward checking tables. I currently can't handle almost-nationwide accounts. I still have it in my nationwide list, but I've added a note of this restriction at the top of the account review.
Rejected Due to ChexSystems Inquiries
Being rejected due to your location isn't the only reason for being rejected these days. More people are being rejected for having too many recent ChexSystems inquiries. When you apply for an account at many banks, they will do a ChexSystems inquiry to ensure that you haven't abused accounts at other banks (such as unpaid fees). However, many not only look for abuses, but they also look at the number of recent ChexSystems inquiries (MyMoneyBlog has a good review of ChexSystems and how you can get your report for free.)
I was told by a FABaT customer service rep that they will reject applicants with more than 4 ChexSystems inquires in the last 6 months.
With banks slashing rates, people are being forced to find new banks if they want to earn a decent rate of return. So this use of ChexSystems is especially tough on savers these days.
Reward Checking Account References:
- List of reward checking accounts available nationwide
- List of reward checking accounts by state (select your state on top)
- Overview of high yield reward checking
- The math behind reward checking accounts
- Reward Checking Accounts with Rate Guarantees
- Media and Consumer Advocates Report on the Value of Reward Checking Accounts
- Fraud liability for debit cards - part 1
- Fraud liability for debit cards - part 2
But two months ago, because I had a maturing CD that I wasn't going to renew at low rates, I applied for a 4.5% rewards checking account at Farmers & Merchants Bank, and to my surprise, was denied on the basis of CS, according to the bank.
The next day, I applied online for the 4.44% First Arkansas Bank and Trust rewards checking account, and was immediately accepted.
So the lesson is, I think sometimes, the banks just use the CS results as an excuse...for doing whatever they want to do for their own internal reasons.
For instance, I have a few reward checking accounts where I fail to meet the requirements month after month. My balance in those accounts: $5.00 each.
When I did get my CS report, there wasn't any negative information. Go figure.
My guess is that the bank doesn't want California residents trying to deposit IOUs in their checking accounts. It is just easier to just not let them open an account to begin with.