Useful Reward Checking Account Tips
POSTED
BY Ken Tumin
Several readers provided useful tips in the comments of my Friday reward checking post. I thought it would be useful to compile these into a short list. Thanks to reward checking, we are still able to get interest rates above 4% in liquid accounts. However, if you're not careful, it's easy to fail to meet the requirements. After a few months of mistakes, your effective interest rate for the year is not much better than a top savings account. Here are some tips that readers have mentioned in the comments to ensure you always receive the top reward interest rates:
For more information about reward checking accounts, please refer to this overview of reward checking. To find reward checking accounts in your area or available nationwide, please refer to the reward checking section of DepositAccounts.com.
- Beware of posting delays. It can be up to 2 business days, but generally occurs 1 day after the point of sale takes place.
- Some require only signature-based debit card purchase. Make sure you understand what transactions count (internet, PIN, or signature only).
- PayPal tries to process debit cards as an ATM transaction if possible which won't qualify as a debit card purchase. When paying with PayPal, go to Funding Options and specify the Visa/Mastercard network.
- Beware of your bank's statement cycle for qualification. Some have really odd cycle dates (e.g., 3rd Wednesday of the month).
- ACH transfers from an institution like Ally Bank will often meet the bank's direct deposit and ACH requirement.
- Many banks expect the reward checking accounts to be used as primary banking accounts. Making too many small purchases may not disqualify you from receiving the high interest rate, but the bank may close your account.
For more information about reward checking accounts, please refer to this overview of reward checking. To find reward checking accounts in your area or available nationwide, please refer to the reward checking section of DepositAccounts.com.
But you are ignoring a lot of real risks for RCAs; which are debit card (higher) risk/(more customer) liability and RCA account (more customer) liability.
Why didn't you do a PIN-based gas purchase or something??
That should have been included in the RCA comparisons.
The limit on withdrawal is the balance in my checking account connected to that debit card.
If I walk in any bank, I can withdraw all of my money from the checking account connected to that debit card, using only the debit card. Try that with a credit card and you will see the big difference.
Debit cards have same effect as carrying a checkbook, the Dollar limit is the balance in the account.
There are overdraft fees, lost card fees, unlimited liabilities, no real protection from fraud, canceling unauthorized charges fees and some other problems like transactions not posting on time and missing the requirements for qualifying for rewards.
That should have been included in the posting in useful posting tips.
Thanks for the information. Not sure why you need that much cash from ATM withdrawal. But that is your personal preference.
I would not take out that much cash or use the debit card for that purpose at all; due to fear of further liability/risk; in addition to the ones you already outlined.
Thanks again.
Please read Ken's post again slowly: "If you have any additional tips, please leave a comment." before you started a campaign to defend Ken.
First, Ken is very gracious and open to positive inputs.
Second, Ken is very tactful to defned his own blog and has no need to others to stand for him.
Third, those additional risk/liability issues are real concerns for many RCA customers, and are much more a recognized concern than small debit transactions or closing dates already outlined by Ken.
Best Regards,
1:33 PM
HAPPY NEW YEAR! And prosperous wishes for your new site!
THANK YOU (and all you wise contributors) for staying on top of things, and especially for writing so warmly, clearly, and reasonably. You educated me and thus made me some serious bucks. Which paid for the holidays!
I tried to do all my Amazon shopping through your link, so I hope it added up for you. (Wish the link were at the top of your home page, so I could get to it faster, hint.)
YOU ROCK!
Here's to you, Ken - our favorite Banking Guy!
Best Wishes everyone!
May we all be healthy, wealthy & wise!