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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Top Reward Checking Accounts at Credit Unions


Both banks and credit unions have been offering reward checking accounts over the last five years. Reward checking rates have fallen at both banks and credit unions, but overall it appears rates have held up better at credit unions. That's not a surprise since credit unions generally offer better rates than banks. So if you're deciding between a reward checking accounts at a credit union and a bank, this is one reason to choose the credit union.

Another downside with banks is that their reward checking interest rates can be hit by the FDIC. There have been several cases in which the FDIC has forced banks to make drastic cuts to their reward checking rates. The most recent case was at First Bank of Clewiston, FL. The bank had received a FDIC consent order with a capital maintenance provision which caused the bank to be classified as "less than well capitalized". All banks that have this classification are subject to the FDIC rate restrictions. As I explained in this 2009 blog post, the FDIC maintains rate caps for many deposit accounts. Unfortunately, they group reward checking with interest checking. Thus, reward checking accounts have to meet the FDIC's interest rate caps which are very low for reward checking.

I thought it would be useful to list some of the credit unions with the best reward checking accounts. I'll start with two that make it easy for anyone to join. I'll then review a few top reward checking accounts at credit unions which have more narrow fields of membership.

Rates and balance caps are accurate as of 3/29/2012

INOVA Federal Credit Union has a reward checking account called Ovation Checking which pays 3.00% APY for balances up to $20K. My first review of this account was almost two years ago when the top yield was 4.00%. INOVA FCU makes it easy for anyone to join via an association membership. There's also an online application.

ABCO Federal Credit Union has a reward checking account called Premiere Checking which pays 2.52% APY for balances up to $25K. My first review of this account was in July 2011. The rate and balance cap have held since July. ABCO FCU also makes it easy for anyone to join via an association membership. However, it's not as easy as INOVA since the application has to mailed.

Southwest Airlines Federal Credit Union is currently tied with Coppermark Bank for the nation's best reward checking account. Both pay 4.00% APY on balances up to $25K. Southwest Airlines FCU's LUV reward checking rates have held steady since my first review of this account in June 2010. The downside with this credit union is a narrow field of membership which is primarily limited to employees of Southwest Airline and 150 Select Employee Groups.

If you live in or near Erie PA, you have two good credit union choices. Both Erie Federal Credit Union and Erie General Electric Federal Credit Union offer reward checking accounts that pay 3.56% APY for balances up to $25K. There must be some competition between these two. Both have been offering very competitive reward checking rates since 2008. Also, both credit unions allow anyone who lives, works or worships in Erie or Crawford Counties to join.

Nassau Educators Federal Credit Union offers a reward checking account called GO Green Checking that pays 3.04% APY on balances up to $25K. My first review of this credit union was in 2008 when the account was paying 4.00% APY. Most people who live, work or worship in Nassau and Suffolk Counties in New York can qualify.

Pasadena Service Federal Credit Union currently has the highest reward checking rate in California with a 3.01% APY on balances up to $25K. It's called High Yield Checking, and the rate has held since I reviewed it last year. The credit union is open to those who live, work or worship in Altadena, Arcadia, Pasadena, San Marino, Sierra Madre, South Pasadena, and the unincorporated area of 91107.

Overview of Reward Checking

If you're new to reward checking, my blog post, 10 Common Traits of High-Yield Reward Checking, should be useful.

To find the highest reward checking rates in your area, please refer to our reward checking rate table. This can also be used to find accounts available nationwide. If you're new to these tables, my rate table guide should be useful.

Related Pages: checking account

Related Posts

51hh   |     |   Comment #1
Pelican State Credit Union: (4.01%, $20K).
viking   |     |   Comment #3

Membership to Pelican State Credit Union is for locals (or emplyeed by select employers) only :-(.
Anonymous   |     |   Comment #4
I live in NJ, is there a CU that i can open an account with. There are no CU that i can have via my employer.
51hh   |     |   Comment #5
Hi Viking:

I am aware of PSCU's membership qualifications.

Ken is surveying CCs (both local and national; easy-to-join and narrow FOM) with high RCA rates; thus I suggested PSCU as a nice addition (great credit union).


Anonymous   |     |   Comment #10
To #4, you can try Nassau Educators Federal Credit Union and state you do business in Long Island.

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