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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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Reward Checking Accounts and the Changing Rates and Balance Caps


This interest rate environment has hit all deposit accounts hard, and reward checking accounts are no exception. In addition to rate cuts, we are also seeing banks reducing the availability of their reward checking accounts and reducing the balance caps.

For the last month we had two banks offering nationally available reward checking accounts with a 3.01% APY for balances up to $25K. It’s now down to one. First National Bank in Ohio just recently restricted its online application to residents of Ohio. That leaves Danversbank as the only institution offering 3.01% APY for up to $25K that’s open to anyone in the US.

Two credit unions with easy membership qualifications still offer around 4.00% APY, but the balance caps are below $25K. Consumers Credit Union in Illinois is paying 4.09% APY for balances up to $10K. Lake Michigan Credit Union is still offering 4.00% APY for balances up to $15K.

Most nationally available reward checking accounts with $25K balance caps now have yields between 2.51% and 2.00%.

It used to be easy to find a reward checking account with a top rate that applied to balances up to $50K. That balance cap has become very rare. For nationally available reward checking accounts, only North Country Savings Bank has a $50K balance cap. The current yield is only 1.75% APY.

So if you’re looking for reward checking accounts, you’ll have to decide what is more important to you. Do you prefer a higher rate with a smaller balance cap or a larger balance cap with a lower rate?

Of course the more savings you have, the more appealing will be the larger balance caps. However, if you don’t mind having multiple reward checking accounts, you might still prefer the higher rates with the lower caps.

Poll: Best rate and balance cap combination?

So the poll for today is asking which do you prefer? I’ve included four choices. The first three are the best nationally available reward checking accounts for balance caps of $10K, $25K and $50K.

The fourth option is for those who don’t like reward checking accounts with small balance caps and monthly debit card usage requirements. A high-interest savings account has always been an easy alternative to reward checking. I chose Salem Five Direct’s savings account for this fourth option. You can currently get a higher rate at Tennessee Commerce Bank, but this savings account promotion requires that you also open a checking account. Salem Five Direct doesn’t require a checking account. Also, its 1.25% APY is guaranteed to last until April 1, 2012 (new accounts must be opened by June 1st).

Reward Checking Overview

If you’re new to reward checking, my post on the 10 common traits of high-yield reward checking accounts should be useful. There are still many local deals that are better than what’s available nationwide. You can find these in our reward checking account rate table. Be sure to use the "Filter Accounts" button above the table to compare accounts in your state.

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rjm   |     |   Comment #1
Im down to 2. One a local credit union which is down to 2.00% on $25k and another that pays 3% on $30k that Im grandfathered on.

I feal continued rate decreases and or more restrictions so Im not going to bother opening more accounts.

Plus, more than 24 transactions tends to be to not worth the trouble for me.

The entire model is called into question with the lower exchange fees.
Anonymous   |     |   Comment #2
RCAs are fading fast. Pretty soon it will not be worth fulfilling the requirements when you include your time to make the purchases, drive around town, online banking log ins, transferring money in and or out for just only $30-50 bucks a month, defeats the purpose and the point of no positive return has long passed.

If you get a $25K CD you will equal the interest lost from RCAs and no wasted time and counting the purchases.

I only have one account now, down from three and it is used for my monthly regular shopping only.
scottj   |     |   Comment #3
And we could soon see Danversbank make changes, Was told they will start converting to Peoples United in a few months. Probaly the first thing to go will be the $100k max some of us are grandfathered in to, going to really miss that
51hh   |     |   Comment #4
Unfortunately (or fortunately?) I still have twenty active RCAs; and I am camping right outside a mental hospital:D
Siana   |     |   Comment #5
For 51hh --  Advise me for RCA.  25k, Nationa wide, Easy a/c open. thanks
adityanm   |     |   Comment #6
@51hh:  I cannot catch you up. I have only 6 accounts paying 3-4.09% APY that require 70 pos transactions per month. I also have many dormant accounts with $0.01 balance that I can restart using in case interest rates rise up again.
51hh   |     |   Comment #7

I have Danversbank (3%, $25K) s my daily checking, it is still nation-wide.  Thier website is superb and I have two $100K (grandfathered) RCAs with them.  I only use one account now for $35K.  The rest of my RCAs are all in the 4% range, none are nation-wide.  I have one secret one, which is sort of nation-wide, PM me if you are interested.

adityanm:  It is becoming a routine, I usually complete all my debit transactions during the first seven days of the billing cycle.  With the Chase AARP 5% daily drills, I am checking into the mental hospital in the next few months. 
adityanm   |     |   Comment #8
@51hh: It seems we both live in the same city and are same age and hobbies. We should meet over a cup of coffee.
siana   |     |   Comment #9
@51hh   thanks and i am interested email  the details at me at
RedCobra   |     |   Comment #10

Look at the bright side. With all the coin you've earned you'll be able to get the finest suite that mental hospital has to offer.
51hh   |     |   Comment #11


That (dollar coins) is one area I did not explore... I can hardly imagine an old man like me walking into a bank with a bag/box of coins.  I mean, a stack of Charter-One Gift Cards still looked noble...  My wife has already complained that I forced all my family members to use AARP cards and that I ran from one bank to another like crazy every day. 
Siana   |     |   Comment #12
@ 51hh ...Thanks  . Please check your email.
adityanm   |     |   Comment #13
what is so special about AARP card. I hardly ever use it.

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