Survey of the Best Reward Checking Accounts for Large Balances

There are still a few banks and credit unions that offer reward checking accounts with balance caps of $50,000. They used to be much more common, but many banks have reduced their balance caps in the last two years. So instead of earning the top rate for balances up to $50,000, you'll only earn the top rate for balances up to some lower balance like $25,000 or $15,000.

If you're lucky, the institution will grandfather you in on the balance cap. Some banks and credit unions have done this so that existing customers continue to earn the high yield for the old balance caps, but new customers will only earn the high yield for the new lower balance caps.

With the new debit card interchange fee regulation scheduled to take effect in October, it's unlikely we'll see any new reward checking accounts with $50K balance caps. That regulation may push the banks to lower their reward checking balance caps. However, it should be noted that the immediate effects of this regulation will only be on large banks with assets of at least $10 billion. The vast majority of reward checking accounts are offered by smaller banks and credit unions.

I did a quick review of the best rates in our reward checking table. If you want to see all rates, you have to select your state to "any". This can done by first clicking on the "filter accounts" button over the table. In addition to changing the Availability option, you can change the investment amount. This will allow you to filter out the accounts with small balance caps.

When you select a large investment amount, you may notice the APYs are not sorted. The reason is that the APY column lists the APYs based on APY in effect for the specific investment amount. So if you set an investment amount of $50K, you'll see many APYs listed at 1.01% which is the APY for balances over the first tier (which is often $25K).

The column for the 1-year estimated earnings takes into account the rate tiers. So if you have an account that earns 4% APY on the first $10K and 1% APY on the next $40K, the blended APY becomes 1.60%. For a $50K balance, the 1-year estimated earnings is $800.

By default the table is sorted by the 1-year estimated earnings. Click on the APY title if you want to sort by APY.

With a $50K investment amount, here are some of the top ones in the table:

Rates and Balance Caps Accurate as of 8/8/2011

• Market USA Federal Credit Union's VIP Checking: 4.00% APY up to $50K, 0.10% over. This rate and cap have remained the same since my first Market USA review in October 2009. However, the credit union recently added extra requirements to qualify for the 4.00% such as a minimum $5 debit card purchase amount and at least 3 online bill payments. Credit union membership is limited primarily to select employee groups, and they allow only 1 account per member.
• Security Bank's Rewards Checking: 3.28% APY up to $50K, 0.52% over. There's an online application, but the first page states that they are only serving residents of Texas. The yield has just fallen from 3.51%. The bank also offers a reward checking and savings account combo called RealRewards. The checking rate is actually a little less than the standalone checking (RealRewards Checking: 3.23% up to $50K, 0.52% over, RealSaver: 1.83% APY up to $50K, 0.51% over) Customers must meet the RealRewards Checking requirements to qualify for these checking and savings rates.
• Lake City Bank's Rewards Checking: 3.04% APY up to $50K, 0.51% over. This account has a long history. My first review of this account was over 3 years ago. Another plus with this account is that they only require 8 debit card purchases per month. Most require at least 10. There's an online application, but the bank requires applicants to reside in their market area (many counties in Indiana)
• Communication Federal Credit Union's Free Performance Checking: 4.00% APY up to $30K, 1.00% over. When I first reported on this account in 2008, the balance cap was $50K. I decided to include it on this list since the blended APY for a $50K balance is still close to the accounts with a $50K cap. Membership is open to residents in parts of Oklahoma. You can see this in the table by looking at the 1-year Estimated Earnings column.
• Department of Labor Federal Credit Union's Reward Checking: 2.75% APY up to $50K, 0.65% over. I first reported on this credit union in 2009. Like Market USA, this credit union is primarily limited to select employee groups, and as you might expect, the main group is the Department of Labor.

To learn more about high-interest reward checking accounts, please refer to my post on 10 Common Traits of High-Yield Reward Checking Accounts, and to find reward checking accounts available nationwide or in your state, please refer to our reward checking table.