We lost our last 4.00% nationwide reward checking account (4% for balances up to $25K) yesterday with the rate cut at South Division Credit Union. The credit union slashed the rate from 4.01% to 2% APY for balances up to $25K. If you can't get higher rates at a local bank or credit union, you'll now have to settle for yields in the range of 3% to 3.50%.
It's a disappointment, but it could be worse. Considering most all internet savings accounts are paying under 1.50% APY, a 3% reward checking yield isn't too bad. Of course the yield isn't the only concern that reward checking customers have to worry about. Cuts in the balance that qualifies for the top rate is also a concern. The $10K cap is growing in popularity. A reader reported last month that Consumers Credit Union will be reducing its cap from $25K to $10K effective November 1st.
Nationwide 3%+ Reward Checking Accounts
Since there are no longer any nationwide 4% reward checking accounts left, we'll have to focus on the 3% group. I've counted 9 in our reward checking table that have a top yield of at least 3.00% for balances of at least $25K. Westfield Bank FSB remains on top with a 3.50% APY. Coulee Bank is second at 3.33% APY, and HCSB Bank is third with a 3.26% APY. The other six that remain all have yields around 3.00%. One of these six is Danversbank which had maintained a 4.01% APY since April 2008. Last Monday, the yield fell to 3.01% APY. So hopefully this 3.01% APY will hold for at least as long as the 4.01% held.
I did a quick check of these 9 banks, and all appear to still be available nationwide. In addition to rate and cap reductions, banks have reduced availability of their reward checking accounts. A recent example is BankTexas. It was offering its 3.25% reward checking account nationwide, but recently reduced availability to just Texas residents (it also cut the balance cap from $25K to $10K). Many banks have started out offering these nationwide, but after demand grows too high, they have fallen back to offering it only to their state or local market area. So please keep that in mind if you try to apply for these accounts.
Searching for the Best Rate in Your State
And don't forget if you're lucky there will be a local bank or credit union offering a reward checking account with yields much higher than 3.00%. You can search for your state in our reward checking table. Use the "Filter Accounts" button on top of the table to select your state. If you're curious to see the top yields regardless of the state, select "any". I just gave that a look, and there are still several 5-percent-plus reward checking accounts. The highest is 5.25% APY for balances up to $30K at Britton & Koontz Bank in Louisiana. This has held for more than a year.