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Interest Checking Accounts With Rewards


As small-town banks, credit unions and online banks compete for business, the results are an increased variety of account options and benefits for the consumer. Some of the options sound amazing – but be sure to look at what you have to do to qualify for the rewards. When you see an online checking account giving out 6% interest for example, you can probably assume you’ll have to jump through rings of fire to qualify!

Interest Checking Accounts with Rewards

Here is how the interest checking accounts with rewards typically work: the offer is for an online checking account with extremely high interest, such as 6%. The account gives you an ATM card that can be used at thousands of ATM’s around the country – and then they will even rebate your ATM fees up to $6 a month or so. Using your debit card as a credit card transaction (swiping the card at retailers and signing the receipt instead of entering a pin number) might even result in earning rewards points – similar to credit card rewards programs that can later be redeemed for cash back or towards merchandize.

The “Catch” ?

Most interest checking accounts with rewards programs require account holders to do a set of very specific things every month. If you fail to do each of the tasks they require, you don’t receive the high interest rate and you don’t qualify for rewards points on the account.

Some examples of the rings of fire you’ll be jumping through each month to take advantage of the higher rates and rewards often include:

  • Maintaining a high minimum balance of $10,000 or $25,000 at all times. If your account balance dips below the minimum requirement, you will not qualify for the interest rate or rewards that month.
  • Using your debit card like a credit card for a minimum of 8 to 12 transactions each month.
  • Have at least one direct deposit each month from an employer or automatic transfer from another bank account.
  • Make at least one online bill payment each month.
  • Log into your online account management system at least once every month.
  • High interest rate will only apply to money up to a certain dollar amount; and any money above and beyond the balance earns interest at a much lower rate. Often you can earn the higher interest on the balance up to the minimum balance requirement; with the rest of your money earning a much lower, negligible interest rate.

The specific requirements for qualifying for high interest checking with rewards will depend on which bank you go with and their unique requirements – but these are fairly typical for this type of account. It’s true that having 6% interest on a balance of $25,000 is better than the standard 3% internet checking account with interest – but the reason banks can offer such high interest rates is because the number of people who can consistently qualify for the rewards and higher rate of interest will be minimal each month. Not to mention, if you have $25,000 available to maintain as a minimum balance in a checking account, you would probably be better off keeping most of that money in a different type of deposit account that earns higher interest over a longer period of time to maximize your earnings- maybe FDIC insured Fixed Rate IRAs or Certificate of Deposit products would give you a better return without requiring that you jump through a number of hoops to get it!

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