If you're lucky, there's a local bank or credit union in your area that offers a top reward checking account. For example, those who live in Erie, PA can qualify for the HD Checking at Erie General Electric FCU that pays 5.12% APY on balances up to $25K as of 1/14/2011. Also, those who live in Alexandria, LA can qualify for the e-Xtra Bonus Checking at Pelican State Credit Union which pays 5.01% APY on balances up to $30K as of 1/14/2011. Unfortunately, most of these top reward checking accounts are in low populated areas. Most people will have to settle for those reward checking accounts that are available nationwide (see review). The best of these are currently paying around 3.00% APY on balances up to $25K.
Today I reviewed our reward checking table for the best rates regardless of the state for balances of at least $25K. I then looked for the banks and credit unions which made their reward checking accounts available to a relatively large group of people. I found four with yields of at least 4.00%.
Please note that banks and credit unions don't only lower the rates and the balance caps, but they also can reduce the availability of these accounts. Many have started out nationwide, but the banks reduced the availability to only within their states or just within their local market areas.
Rates, Balance Caps & Availability Accurate as of 1/14/2011
- Southern Bank's Kasasa Cash account pays 5.01% APY on balances up to $25K. My first post was in October 2008 when the yield was 6.01%. The rate has held up well. However, they did reduce availability. It used to be available nationwide. It's now available only residents of Missouri and Arkansas only via an online application.
- Golden Plains Credit Union kept its yield at 6.01% longer than any other institution. It fell to 4.44% APY for balances up to $25K in September 2010. My first post on this account was in April 2008, and at that time the credit union's easy membership made this account widely available. However, the credit union limited the members eligible for this account to only residents of Kansas State. I just noticed the credit union's Q&A appears to have narrowed this further to Central and West Kansas.
- ViewPoint Bank angered many people who tried to apply for its Absolute Checking Account. As I described in June, ViewPoint doesn't make it easy. The account was more popular when it was available nationwide with a balance cap of $50K. It's now only available to Texas residents, and its balance cap has fallen to $25K. However, it still has a top rate of 4.00% APY.
- Nassau Educators FCU's Go Green Checking has been paying 4.00% APY on balances up to $25K since my first review in December 2008. Instead of this account becoming harder to qualify for, it became easier last summer when the credit union expanded its field of membership so anyone who resides in the large New York counties of Nassau and Suffolk can qualify.
If you know of any other good reward checking deals that are available to a large group, please leave a comment. This year is going to be a test for reward checking as the ultra low interest rate environment drags on and as new debit card regulations take effect. I'm hoping reward checking can continue to be a good alternative to internet savings accounts and CDs.
Other High-Yield Reward Checking Accounts
To find reward checking accounts in your state or to find those available nationwide, please refer to the reward checking section of DepositAccounts.com.