About Ken Tumin

Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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The Shrinking List of Nationwide High-Yield Reward Checking Accounts


We learned again that reward checking accounts with top rates available nationwide don't last long these days. The latest bank to fall off this list is First Clover Leaf Bank. On September 14th, I reported that this bank's 4.01% reward checking account was available nationwide. I'm afraid that has ended. The bank just made three big changes to the account: 1) It now requires a branch visit to open, 2) the yield fell to 3.85%, and 3) the balance cap fell from $25K to $15K. It's rare for a bank to make this many changes so fast.

Another unfortunate reward checking account change is the rate cut at Danversbank. Readers had reported this several weeks ago, but the bank just sent out emails to customers yesterday. The top yield will fall from 4.01% to 3.01% APY effective October 4, 2010. Danversbank had been offering this 4.01% APY since April 2008. Before that time it had been 6.01% APY.

That will leave South Division Credit Union as the only nationwide reward checking account with a 4.01% APY for balances up to $25K. This Illinois credit union is considered nationally available since its field of membership makes it easy for anyone in the U.S. to join. However, it's a small credit union which primarily serves an area in the Chicago suburbs. I would be interested to know if anyone from outside the Chicago area has been able join and open this account. Since it's a small credit union, I'm skeptical that it's an easy application process.

If you want to reduce the chance of seeing rates fall soon after you open a new account, you may want to settle for a low-to-mid 3 percent yield range. Three banks on my recent list of the 5 best nationwide reward checking accounts continue to pay between 3.26% APY and 3.50% APY for balances up to $25K. Hopefully, these rates will continue into October. All have online applications that can be done in any state (at least as of today). If you're lucky, there will be a bank or credit union in your state or local area that offers higher reward checking rates. You can find these in our reward checking account table.

  |     |   Comment #1
I recently opened a reward checking account with SDCU when word went out that Danvers was chopping its interest by 25 percent. At first, I was put off by all the requirements to maintain fee free membership and qualify for the 4.01 APY interest on the reward checking. I am less concerned about that now, after several conversations with customer reps who walked me through the whole application and account setup.  Response time for account approval and opening was extremely fast, including shipment of the debit card. So far I am very impressed with this organization. The 3 major stumbling blocks for me to decide on this membership and reward checking were member savings minimums of 300 dollars after 6 months to avoid fees, 250 dollars in direct deposit to checking each month and all 12 Visa check card purchases to be made as credit, not PIN to qualify for the higher interest rate.  In the end, perhaps it will be all these seemingly onerous requirements that will help SDCU to maintain the 4.01APY interest on their reward checking, where almost every other institution has failed to keep their interest rates at a higher level.
Jeffry Pilcher | TheFinancialBrand.com
  |     |   Comment #2
Redneck Bank discontinued their product too. Their site says "Sold Out."

  |     |   Comment #3
to me I think the no rate guarantee on these accounts is a big downfall for me.  I just opened accounts with Danversbank and First Clover Leaf and before I get a chance to move the 25K into each account I hear on this board about the falling rates.  I am glad I heard before I moved the money as I am going to rethink what I want to do - maybe cds?  I try to keep my Chex and Equifax hits to a minimum to keep my options open so it is annoying when the rates drop so quickly.  So I took the hits and went through all the girations of opening accounts and I'll never see the 4.01% apy on these two accounts - maybe I won't even use them.  SAD!  : (
  |     |   Comment #4
What FCLB did was bait and switch on a grand scale. My account is so new I have not even received my debit card yet! I may close it on principle alone.
  |     |   Comment #5
I wish I had not bothered applying for the First Clover Leaf Bank reward  checking account. I had the same experience as #4, and still don't have my debit card, but I had fully funded the account.  If I had called and talked with the customer reps at this bank before deciding to apply, I probably would not have opened up the account.  The bank's online application was brand new and they admitted to having numerous technical difficulties, including getting the accounts opened, funded, and debit cards sent in a timely manner. I would also recommend that depositors pull out all but a minimum amount from their accounts as a reponse to this "bait and switch on a grand scale".
  |     |   Comment #6
This has been happening for the last 2 years, nothing surprises me anymore. Many local banks have drooped the rates, maximums and increased the requirements.
It looks like they will phase out these accounts in a year or two or they will make it not worth while the time spent to fulfill the requirements for just few dollars of interest received.
South Division Credit Union
  |     |   Comment #7
We here at South Division Credit Union have read both the editorial and user the comments on this site since July 2010, amused to be included in what appears to be the Wall Street Banker game of "let's get all we can while the getting's good" that seems to prevade this site.  The upside is we have had a lot of interest and Membership enrollments, given our modest size.  The downside has been how much financial education we have had to dispense in the process given the obvious poor results this very same game played upon all of us twice now in the last 80 years.  Abraham Lincoln once wisely remarked: "You can fool some of the people all of the time. . . .", referring to how easily some of us continue to delude ourselves, even in the face of disaster.

So, site editors, please do continue chasing down these rate offerings with your recommendations and discount us.  We are not looking for deposits, as one of your editorial comments seemed to stumble upon recently.  Nor are we looking for banking consumers only interested in out-gaming their financial institutions and then moving on.  That role reversal is about as hopeful as the grudge gambler coming back and breaking Las Vegas.

What we are looking for is that minority of responsible citizens who have never forgotten the original American School of Economics; that is ordinary people aspiring to greatness by building their democratic communities through mutual participation.  The silk stockings of modern Wall Street and their wannabe followers need not apply. 
  |     |   Comment #15
#7 is full of s***.  If banks want customers to use their accounts in a way that pleases them, set specific requirements.  I.E.  say that the 12 debits must be $25 each and the transfer must be over $500, or whatever they want.  Banks don't do this because their research has shown that these special rates and deals attract more customers.  So they play this game with their own teaser rules and bonuses.  I at least respect Danversbank for sending out an e-mail about their change, unlike some sleazy banks that just slash the rate without any notice.

South Division Credit Union (if that's really them) have some nerve blaming people like us for taking advantage of their silly little "open an account and get a toaster" deals.  Who do you blame when a bank is giving away free money... the bank that is giving it away or the people that are taking it?
  |     |   Comment #8
Regarding South Division Credit Union comment... I think the majority of us here are just trying our best to get a fair return on our hard earned savings. We are frustrated by what has happened and feel that we, as the responsible minority of people who have savings and little debt are paying for the wrong doings of others.

We may rate chase, but we are also very loyal to the institutions that treat us right. Unfortunately, rate chasing has come down to a method of survival for some of us.
  |     |   Comment #9
I would agree with tightwad.   In fact, I think it is odd that SDCU  would come onto this blog and slam its members. Where on this thread was there anything derrogatory or incorrect expressed about SDCU??? In fact, the information presented in the comments was very fair, complementary, and pertinent.  I have really appreciated my contact with the SDCU customer reps, but this SDCU person on here is way off base. You don't need to be preaching to the choir, us savers, but to the people who got this country into the situation it finds itself today, the financial institutions. Anyway, SDCU is not a bank, and its goals are different from those of banks. CUs are member owned and in some cases, can offer much better deals than other financial institution for us savers. Lets just leave it at that.
Jim davis
  |     |   Comment #10
 You can  be proud that your hard earned savings is being used to keep the system from collapsing, making endless unemployment  and food stamp payments to the unwashed masses, and keeping the Wall St bandits in penthouses and limos.
  |     |   Comment #11
SDCU Post #7: Thank you for your 'friendly" post.  We all here are just savers wanting to earn a high return for our limited fund. 

Thank you to express your attitude clearly here and prior to our applications, most of us would not get near you with such a great attitude:D

Not sure such a "nice and discriminative attitude" is your general culture/policy or just your specific disposition.  Can you share your position at the credit union?

Thanks again:-) 
  |     |   Comment #13
I copied comment #7 and will be sending it to the bank president if necessary. I find it disrespectful of the readers of this website. There are no banking laws against trying to get the most return on one's money.
  |     |   Comment #14
How do we know that the post by "South Division Credit Union - #7" is really from a SDCU representative?

BTW, for those that I applied to SDCU, did they do a HARD credit pull when you applied? It happened to me with a few credit unitions :-(.
  |     |   Comment #16
The greed of banks is a big part of the reason we are in this mess with us savers getting ****ed on rates, So yes I will suck  banks for as much as I can get. 
  |     |   Comment #17
Reward those that offer the best products....also known as voting with your dollar.  Want to trash savers, go ahead, we are use to it.
  |     |   Comment #18
No one representing a bank or CU would make a public comment like #7's.  "We here at South Division Credit Union" is likely some joker with way too much time on his/her hands.  The comment doesn't merit any further response.
  |     |   Comment #19
Any bank or credit union that offers and advertises a new account -- and then cancels it or dramatically changes its terms shortly thereafter -- deserves the disdain of its customers. It just shows the people running that institution either a) don't know what they're doing in terms of being able to offer marketplace viable accounts, or b) is knowingly offering teaser terms that they know going in they won't intend to maintain. Either way, it's a clear sign of a poorly run, poorly managed institution.

Jeffry Pilcher | TheFinancialBrand.com
  |     |   Comment #20
I thought credit unions were supposed to be "friendly" and have "better rates." That's what they've been telling everyone for years. So what's up with all the hostility in SDCU's comment?
  |     |   Comment #21
I called to find out whether there was any grandfathering in on the rates or caps for the 3.85% tier. None, but the CSR did state that although the 3.85% rate went in to effect on 9/29, the reduction to 15K for the high paying tier will not take place until November 22nd because unlike the change in rate, "we have to give customers a 30 day notice before we can change the tiers". She did put me on hold to talk to the VP of the bank, and came back with this tidbit. I have not called back to confirm that she was correct.

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