High-Yield Reward Checking Account at Randolph Bank & Trust Company in NC - NC Only
Update 9/13/2011: The rates have fallen. Please refer to the bottom of the post for the rate history.
Randolph Bank & Trust Company is offering a high-yield reward checking account with a yield that is rarely seen these days. It's called the Choice Checking Account, and it has the following rates and features if certain monthly requirements are met (as of 9/13/2011):
- 2.25% APY on balances up to $25,000
- 0.75% APY on portion of balance over $25,000
- 0.10% base rate if requirements are not met
- Free nationwide ATM withdrawals
Monthly requirements include:
- Effective 1/1/2011: 6 debit card purchases (minimum $20 each) Before 1/1/2011: 12 debit card purchases (minimum $5 each)
- Effective 1/1/2011: 1 direct deposit or 1 ACH withdrawal. Before 1/1/2010: One direct deposit or one Bill Pay or one Auto Draft
- Receive your monthly statement electronically
Other features of the account include:
- Minimum amount to open is $100
- No monthly service charge
- No minimum balance requirement
Note the $5 minimum that's required for each debit card purchase. I almost did not notice this requirement. It's listed in the small print right before the typical warning that ATM transactions don't count.
Update 4/25/2011: The bank now states that anyone in the following states can apply online: NC, SC, GA, FL, TN and VA.
It should be noted that small banks often change their policy on account availability.
Branches are located in the North Carolina cities of Asheboro, Burlington, Mebane and Randleman.
The bank's ratings for safety and soundness are fair: 3½ stars (good) at BauerFinancial, 3 stars (performing) at Bankrate.com and an overall health score of 3 out of 5 at DepositAccounts.com (see our financial overview of Randolph Bank and Trust Company). These ratings are based on 3/31/10 data except for Bankrate which is based on 12/31/09 data. The bank has been a FDIC member since 1978 (FDIC Certificate # 22746).
Thanks to the reader who emailed me news of this reward checking account.
Finding the Best Reward Checking Account
Please refer to the reward checking section of DepositAccounts.com to find reward checking accounts in your state or that are available nationwide.
Unlike Randolph Bank, the vast majority of banks and credit unions which offer reward checking accounts don't have a minimum for each debit card purchase. With the passage of the financial reform, banks may not feel it necessary to set minimums since retailers will be allowed to set minimums as high as $10.
- 09/13/11: 2.25% up to $25K
- 03/04/11: Available to NC, SC, GA, FL, TN, VA
- 12/31/10: 2.50% up to $25K; 0.75% over; 0.10% base
- 08/03/10: Available to NC only
- 07/16/10: 4.75% up to $25K; 1.00% over; 0.10% base
It's thinking like this that's causing banks to lower interest rates and restrict RCAs to local customers. Basically, this type of investor wants to earn at least 4% on a $25K deposit while spending under $15 on cheap convenience store items. In my mind you're basically ripping off the bank. Where else are you going to earn 4%? Not with a CD. And how much are you going to have to spend with your 2% cash rewards credit card to earn $75? Are you prepared to spend $3,750 a month to get that $75. At a time when interest rates are so low, RCAs offering at least 4% are a God-send. So give them a chance to earn a little money on your deposit. Spend at least a couple hundred dollars a month on your debit card. All you're giving up is $4 by not spending it on your 2% cash-back credit card and you're making at least $75 in interest from your RCA.
I have 4 rewards accounts now. It is becoming a challenge to do all the transactions. Adding a 5th one is tempting though. I can borrow money on my HELOC at 2.25%, and put it in one of these at 4.75% and get $625 a year profit. If the HELOC which is at prime-1% ever goes up in rate, or the checking account come down, I can simply close the account and pay off the HELOC at any time. Of course I would want no risk with this money at all, so corp bonds etc are out. But an FDIC insured checking account seems like a no brainer.
They have stopped opening accounts by mail because it requires too much work for them. So they ask everyone to wait until August 1st, when the online application will be available.
But then, when the accounts person sent me a follow-up email, she indicated they will require anyone not opening an account in branch to submit a notarized document as part of the app, meaning you have to go out and pay for the notary service.
I wish I knew what exactly they're asking to have notarized. But the secure email they sent me with the account opening documents I've been unable to open in either Firefox (where it crashes my browser) or in Internet Explorer (where clicking the link in the email to proceed does nothing).
It seems strange to me that no one else here has mentioned the issue about being required to submit a notarized document of some kind as part of the application process.
It's not a big deal, but I find it irksome when many other banks are perfectly fine to open new accounts based on them running a credit or ChexSystems report and receiving a copy of your DL or other similar identify--without having to go thru the trouble of getting something notarized.
If other banks can perfectly well satisfy the Patriot Act et al without requiring a notarized document, then why should Randolph Bank have a problem doing the same.
Notarized document is just one page to autheticate your identity: Go to "your" bank, show the driver's license, and have the notary sign on the page. The bank rarely charges a fee for such a service.
The bank sent us the scanned version of application forms vai e-mail that we filled out and mailed back to them. One can not open account online yet. They claimed that the online application would be available on 1 August.
Hope this helps.
The chex systems questions were very confusing, though. On at least two questions, I could have chosen two of the fivesupplied choices. (For instance, one of the questions asked for the county associated with a previous property address, and two were correct. Another asked for the taxes paid for a property?!?) Luckily, I chose the correct answers, as the application went through.
Off to order a new Chex systems report. They must have added a lot of new information.
So I called the 888 number on the verification fail page. The CSR was nice, but unable to help me. I asked if I could fill in an app & mail or fax it in. She told me I had to use the online tool, that they're not taking paper apps any longer & have maxed out on the # of out-of-state applicants they'll let apply via non-online method, and that 2 fails with the online method means you have to wait 30 days to reapply.
I went to a Chase branch and, of course, they was told that they don't notarize anything.
Anon. #33: Yes, if requirements are met.
"We apologize for the inconvenience, but there is a problem with the accuracy of the information you provided.
In order to provide the highest levels of security around your personal information, we cannot proceed with the account opening process.
If you have questions please contact us using the information below:"
This is not my first time submitting an application to this sort of thing, so I don't know what's going on. I did it twice with the same result. Frustrating.