For those with large balances, reward checking is problematic since most accounts cap the balance that qualifies for the top rate. However, even if you don't have a large balance, there is one issue to consider. There's no guarantee that reward checking rates will hold up. I hope they do, but as we've seen this year, rates have fallen.
Back in the second half of 2007 State Bank of Toledo was offering a nationwide reward checking account with a 6% APY with no balance cap. During that time, Pentagon Federal Credit Union came out with 6% long-term CDs. Some asked why lock your money into a CD when you could get the same rate in a liquid account. Two and a half years later, State Bank of Toledo's reward checking rate is down to 2.51% APY for balances up to $70K.
No one knows how rates will change in the future. Using CD ladders is a way to hedge your bets for both future high and low rates. So I'm not giving up on long-term CDs even in this current interest rate environment.
One other interesting note about 2007 is that this was the year that FNBO Direct came out with their 6% savings account special that lasted from May through September of 2007. After that promo, the rate fell to 5.05% APY. Like other savings accounts, the rates have fallen, and it's now at 1.40% APY which is about average for today's online savings accounts. So State Bank of Toledo's reward checking account has done well as a liquid account alternative to online savings accounts.
To learn more about reward checking, please refer to this reward checking overview.