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There are still several banks and credit unions offering high-yield reward checking accounts with rates over 5.00% APY on balances of at least $25K. These are not widespread. Most reward checking rates are below 4.00%. In February I reviewed five institutions that have been offering nationwide reward checking with rates of at least 4% for over two years. Only one of those five (Danvers Bank) is still offering 4% on a $25K balance. There are still a few nationwide reward checking accounts with rates around 4.00%, but they're becoming harder to find.
If you want a reward checking account with rates over 4.00%, you'll have to hope your local area has institutions offering these. There are not many areas, but there are a few where banks may have easier times keeping rates higher due to higher loan demand and fewer serious savers. You can see the factors that affect the rates of reward checking in this post and in my post on the math behind reward checking.
Below are a list of five institutions that continue to pay at least 5.00% APY on balances of at least $25K as of 4/05/2010:
- 6.01% APY on up to $25K at Golden Plains CU in KS. Golden Plains is the only institution that I'm aware of that is still offering 6% on up to $25K. It has been just over two years since my first post on this 6% reward checking account.
- 5.51% APY on up to $25K at The Farmers State Bank in KS. This is another top rate at a Kansas institution. However, this doesn't have the history of Golden Plains. My first post on this bank was in January of this year.
- 5.25% APY on up to $30K at Britton & Koontz Bank in LA and MS. Kansas doesn't have all the top rates. The South has a few also. My first review of this account was in September 2009.
- 5.15% APY on up to $25K at MBT Bank in Iowa. This bank was guaranteeing this 5.15% to last until 5/15/2010 which was nice when I first reported on this in July 2009, but now with the date only a month off, it's worrisome. Also, the only mention I can find of this account is at the bottom of their video page.
- 5.12% APY on up to $25K at Bank of the Southwest in NM. This is another new one that I first reported on in January 2010
As I mentioned above, these are all local deals which likely require branch visits. Also, if you don't live near the branches, it's a good idea to call and verify that they will allow you to open an account. Banks will often limit new accounts to only those in their local market area. One reader left the following comment about his experience with Bank of the Southwest:
I drove 3 hrs to Roswell to open a True Checking account and I was denied. The vice president said that since they are a community bank, they only serve people in their community. I wish they told me that when I was inquiring over the phone.
Other High-Yield Reward Checking Accounts
Refer to the reward checking section of DepositAccounts.com to find reward checking accounts in your state or that are available nationwide.
The guy wne the First American across the street; First American droppe dthier rate from 5% to 3% April Fools' Day. One can not win...
Thanks for this great post. Sorry for the typos and stuff; did not have my coffee this morning.
My original points:
1. Do not do rate-chase, especially with these top-rated RCAs. Even it is local and/or stable, it may drop significantly any time; according to the law of gravity.
2. The fundamental trend is lower rate. But the RCA limit has come in as another variable. I would personally prefer a moderate rate (say 4%) with a higher limit (say $50K) vs. high rate alone.
3. Banks are making RCAs more difficult in terms of requirements. For example, some added the minimum debit transaction requirements. Some added the payroll direct deposit requirements. One CU recently imposed the minimum payroll direct deposit amount. Some added number of debit ACHs... One truly has to set a threshold as to how much effort one is willing to make for those 2% extra interest.
4. To mitigate ACH/debit risks, one should always attempt to reduce debit/POS daily limit, if the said bank allows. The general rule is the examine RCAs once every 2-3 days.
5. The rate and limit are not the only factors fro selecting RCAs. Other factors include (1) offering of free checks (great benefit when one changes RCAs), (2) allowing multiple accounts, (3) local (near-by), (4) Shared branching (only for credit unions), etc.