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Three Years of High-Yield Reward Checking Accounts


I was reviewing the history of my reward checking reviews, and I noticed it was three years ago, April 2007, when the pace of my reward checking posts really picked up. In that month I reported on 10 reward checking accounts. As you might expect, rates have gone down. However, compared to internet savings accounts, many reward checking rates have held up quite well.

One example is Danversbank which I first reported on in April 8, 2007. At that time, Danverbank was paying 6.01% APY on balances up to $100K. In 2008 the rate fell to 4.01% APY, and it has held to this day (4/28/2010). Another thing that changed was the balance cap. The top rate now only applies to the first $25K (except for the lucky few who were grandfathered in). Danversbank is based in Massachusetts, but they have an online application, and they allow anyone in the US to apply.

Another example of a reward checking account that has lasted for the last 3 years is the one at Capital Bank in North Carolina. I first reported on this account on April 12, 2007. At that time it was offering 5.01% APY on balances up to $25K. The rate fell to 4.01% APY in November 2008, and it has remained at this rate ever since (as of 4/28/2010). However, the balance cap just recently fell to $10K. So now only the first $10K qualifies for the 4.01% APY.

Both Danversbank and Capital Bank have kept these accounts available nationwide. However, this could change at anytime. As we have seen many times in the last couple of years, banks often reduce availability of the reward checking accounts. The latest example is Bank of the Sierra which just recently reduced availability of its 4.09% reward checking account to only CA and WV residents.

One thing that's nice to see is that both Danversbank and Capital Bank continue to advertise these accounts on their home pages. When a bank stops promoting an account, that's usually a sign they have too much demand.

It's nice to that reward checking has several years of history behind it. Banks have had to cut rates, but it's no worse than the rate cuts of internet savings accounts. In fact, as I showed in this post, some reward checking accounts are holding up better than internet savings accounts.

To learn more about reward checking accounts, please refer to my recent post on the pros and cons of reward checking.

For the latest rates, please refer to the reward checking section of where you can find reward checking accounts in your state or that are available nationwide.

Jo/GaelicWench   |     |   Comment #1
Hi Ken! The other day, while reading the messageboards on MSN's Your Money, Liz Pulliam had written a post asking if any others had come across checking and savings accounts offering bonuses or high interest rates.

I decided to mention you by name (not your website, as that would be regarded as promoting or advertising :-( alas) and what your website is all about. I wrote that I always went to (no name mentioned) before I went to because you do a truly good job of describing the latest by calling CSRs and getting your info first hand, whether they allow nationwide verses local only applicants. I also mentioned that I can also find out the banks' strengths or weak ratings with Bankrate and Bauer Financial.

Told her it was probably more than she was looking for, but that I was also passing this info for others to go to, too. Hopefully, this helped as to where it is I got my information to get the latest rounds of bonuses, interest rates and so on.

Hopefully, I am not too off-topic here.

Anonymous   |     |   Comment #3
Capital Bank is no longer taking nation-wide applicants. This is the email response I received:

Hope you are well today!  We are a small community bank and currently have branches that are located only in North Carolina.  We appreciate your interest in Capital Bank, but unfortunately we are not taking applications from out of state applicants at this time.


Best Regards,


Capital Bank Customer Service

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