Reward Checking Accounts with a History of Rates over 5.00%

Last week I reported on five nationwide reward checking accounts with yields of at least 4% and that have been around for at least 2 years. Higher reward checking rates are available, but they are only local deals. There are no nationwide 5% reward checking accounts that I'm aware of, however, there are still many reward checking accounts available in parts of the country where you can get at least 5% APY for balances up to $25K. As a comparison, ING Direct's savings account is currently paying 1.15% APY. So a 5% APY these days is an especially sweet deal even for the extra hassles required of reward checking. I've gone back through my old posts and identified 5 that have been offering 5%+ rates for over a year.

This shows that if you have a choice between two reward checking accounts with one limited to your local area and the other available nationwide, the local one will have a better chance maintaining higher rates. Nationwide accounts attract more rate chasers who will maintain larger balances and make fewer debit card purchases. You want a reward checking account at an institution where there are more of the average Joes who maintain smaller balances and spend a lot more on their debit cards. This will make it easier for the institution to keep high rates. Refer to my math behind reward checking to see why this is the case.

Even institutions that keep their accounts restricted to their local areas may not have an easy time maintaining the high rates. Similar to my post from last week, I thought it would be interesting to see if there were any reward checking accounts that have been around for over a year that are still offering at least 5%. As I mentioned, these are not nationwide deals, but if you're fortunate to live near one of these institutions, you can still get a rate that's more than 4x the rate you can find at most internet banks.

There's no guarantee that these institutions will maintain these high rates, but that's why I'm picking out the institutions that have been offering them for over a year (This is based on when I first posted on the account). This is not a guarantee that the high rate will continue, but at least you know it's not a teaser rate.

Rates as of 2/22/2010:

1. Golden Plains Credit Union's Golden Rewards Checking still pays 6.01% APY on balances up to $25K. My first review of this account was in April 2008. The credit union has an easy way you can qualify for membership via an association, however, the credit union did the unusual thing to restrict this account to only members who are Kansas residents.
2. Erie General Electric Credit Union's HD Checking has been paying around 5.12% APY on balances up to $25K since May 2008 when I first reviewed the account. One thing that's atypical about this account is that it has a minimum balance requirement of $500. Most reward checking accounts have no minimum. Membership is limited to residents in Erie and Crawford County, PA
3. Crescent State Bank's reward checking has been paying 5.01% APY since January 2009. One thing that has changed since my 2009 review is that they now limit the number of accounts to two per customer. One positive change is that the bank now has an online application, but it states that they are only accepting various zip codes within the state of North Carolina.
4. Pelican State Credit Union's e-Xtra Bonus Checking used to pay 5.25% APY for balances up to $30K, but this went down to 5.01% APY last October (wish all rate drops could be this small). The $30K cap is nice, but you pay for it with a higher debit card usage requirement (15 per month). I first reported on this account in July 2008. Membership is limited to those who live, work or worship in certain areas of Louisiana.
5. Southern Bank's Kasasa Cash account has been paying 5.01% APY on balances up to $25K since May 2009. It had been paying 6.01% APY when I did my first review in October 2008. Another unfortunate change has been reduced availability. It started out with nationwide availability. Its availability was first reduced to 5 states, and now it's only available to residents of Missouri and Arkansas.

Please note that the above rates are based on the institution's website as of the morning of 2/22/2010. Please check with the institutions for the latest rates. As we've seen in the last year, high rates can drop fast. However, at least the above institutions have a history of high rates so you know these are not teaser rates.

To find nationwide reward checking accounts and reward checking accounts in your local area, please refer to the reward checking section of DepositAccounts.com.