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Useful Reward Checking Account Tips

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:
  • 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.
Thanks to the readers who provided their experiences and insights. If you have any additional tips, please leave a comment.

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.
  |     |   Comment #1
what does "like Ally Bank" mean?
  |     |   Comment #2
A bank that allows you to transfer funds to another bank electronically(ACH). Some banks and credit unions allow you to set up and link outside banks to transfer money back and forth. Ally bank is one of them.
  |     |   Comment #3
It used to be that PIN-based transactions would post before I got home from the store. Now I find that several days may elapse, about the same time span as signature-based transactions, so I try to fulfill all requirements a week before the cycle-end date.
  |     |   Comment #4
Alliant is another with a higher APY.
  |     |   Comment #5
Good summary, Ken.

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.
  |     |   Comment #6
Timely. I just missed my first month of rewards due to a rush job to get in my debits in the last week and a final debit that I did Sunday night, but didn't post till Wednesday, one day late.
  |     |   Comment #7

Why didn't you do a PIN-based gas purchase or something??
  |     |   Comment #8
Debit cards are not same as Credit cards, liabilities are different and exposure to fraud is greater.
That should have been included in the RCA comparisons.
  |     |   Comment #9
I can withdraw as many times as I want from an ATM machines per day using Debit card, credit card does not allow that.
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.
  |     |   Comment #10
Above Post: Mostly correct, but not true on debit card withdrawal: There is a daily limit for ATM withdrawal, usually $1,500.
  |     |   Comment #11
To Anonymous, at 9:56 AM, December 24, 2009, I have succeeded to advance more cash at POS transactions than the daily limits you are referring to. Also, some ATM machines do not send back the withdrawal record to the bank until 24 hours later. You can fool ATM machine if you make a deposit and immediate a withdrawal with the same transaction. The deposited amount will be added to the withdrawn amount and not counted toward the $1500 limit you are referring to. There are other tricks and gimmicks that will fool ATM machines, which I will not disclose here.
  |     |   Comment #12
To Snippy / Anonymous at 1:33pm, 8:28am, 8:48am, and 1:13pm: Ken can write whatever he wants in his blogs, and doesn't have to include every conceivable caveat just to satisfy your whims. If you disagree, get your own blog.
  |     |   Comment #13
PIN based wouldn't have counted. I thought I had it made when I made my final debit Sunday night and Tuesday was the deadline. I have some feeling some purposely delayed posting occurred, but I'll accept my mistake this time and learn from it. I was trying to not do frivolous multiple transactions, but next time, I will if I'm in a time-crunch. My mistake was not using my card while out of the country to avoid fx fees, but would have been better to just accept a few of those and not have had to rush.
  |     |   Comment #14
1:13 PM:

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.
  |     |   Comment #15
4:00 PM:

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
  |     |   Comment #16
Nice to have a name for Banking Guy (whether real or not), so Happy Holidays Ken! Merry Christmas Banking Guy! Happy Hannukah, Happy Kwanza BG (how I note you, which could also mean Big Guru)!

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.)

Here's to you, Ken - our favorite Banking Guy!
Best Wishes everyone!
May we all be healthy, wealthy & wise!
Lillian Moore
  |     |   Comment #17
I thought it was interesting that some checking account rewards require only signature-based debit card purchase. This was strange because I thought that all transactions counted toward the rewards. I will be sure to double-check with my bank to see what limits are set for me.
Kendall Everett
  |     |   Comment #18
Being aware of the posting delays is important. Knowing that you have enough in your account for the transactions you planned is helpful. If you are unsure if there will be enough in the checking account, holding off on a purchase until all other purchases have cleared is a good idea. http://www.tappancu.com/ 
Jack Mulligan
  |     |   Comment #19
I think it's an excellent tip to be aware of your bank's statement cycle. My brother's bank has all of it's cycle dates on a Sunday and I know that threw him off when he first got it. I don't know if I'm aware of my banks cycle date. I should look into that! http://www.riograndecu.org/checking 

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