Revisiting Reward Checking Accounts

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It’s been almost two years since I last looked at reward checking accounts and I thought it was about time we checked them out again to see what had changed. Two years ago, most reward checking accounts offered over 5% interest on deposits of up to $10,000 (sometimes $20,000 or more) if you satisfied certain requirements. Those requirements often included a dozen charges on the debit card, online banking, and paperless statements.

Reward Checking Today

Evantage Bank was one of the banks I looked at two years ago. They offered 5.25% APY on a checking account for balances up to $10,000 with a requirement that you use their MasterCard CheckCard at least 10 times a month and sign up for paperless statements. Back then, interest rates on high yield savings accounts were much higher.

I was surprised to learn that Evantage has kept the same requirements (10 charges, paperless statements) and their interest rate is still a healthy 3.75% APY. You earn that on your balance up to $10,000 and you earn 1% on amounts over $10,000, which is only slightly lower than what many online savings accounts are offering.

In fact, since many of the banks work through the same rewards checking program, BankVue, their interest rates have been about the same – about 3.75%. Bank of the Wichitas, AmericaNet Bank, and First New England FCU all had rates around 3.75%, which is much much higher than prevailing CD rates and online savings account rates.

So, if you’re looking to get a little extra interest and are willing to deal with the hassle, I think reward checking accounts still offer a good opportunity.

{ 14 comments, please add your thoughts now! }

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14 Responses to “Revisiting Reward Checking Accounts”

  1. I haven’t checked recently, but you used to also be able to open 2 of those accounts with evantage. Of course, you would have to fulfill the requirements for each one separately, which would mean a lot of transactions with the debit cards, but it’s a good way to get a nice return rate on up to $20K. BTW, even though you would have to make 20 transactions a month, there is no minimum amount on those transactions!

  2. SoonerNATX says:

    maybe the link was wrong but BancVue looks like a service provider to banks… not an actual bank itself. Maybe i didnt look hard enough.

    • NateUVM says:

      Your research isn’t innaccurate. It’s not a bank. As it’s referenced to in the post, it’s the provider/servicer of the reward program.

  3. cubiclegeoff says:

    I wasn’t sure about these at first, but last year I opened an account at Danversbank when the rate was about 4%, now it’s 3%, which is still good for up to $25k. It definitely has been worth it, and keeping up with the 12 debit purchases a month hasn’t been a problem, nor has it cut that much into my credit card rewards.

  4. fairy dust says:

    I find it interesting that the requirements for getting interest in these accounts is almost the same as the new requirements being set up by other banks just to keep “free” checking free with no fees. If I’m going to have to do X debit card purchases each month, I might as well earn interest for the trouble!

    Anyway, I’m really just curious what all people do to get to that 10-12 (or however many) debit card purchases each month? As a rule, I’m a cc person (pay in full each month) to get the rewards, and since I use my cc to pay for just about everything, I prefer not to use my debit card, so it would be something of a learning curve. If there are easy online ways of dealing with the debit card usage, I might consider it. But I’ve read some suggestions of buying 12 different packs of gum, each on a separate transaction, every month. I think the cashier and I would both get tired of that pretty quickly, so maybe these accounts aren’t for me.

    • Ute in NV says:

      The credit card I use isn’t accepted at Costco, so I use my debit card there 2-4 times a month, sometimes more if I also gas up at Costco. Other than that, I just look for the small transactions each month and pull out my debit card for those, rather than my credit card. For example, a $6 lunch at Wendys or $2.50 for a gallon of milk at Walgreens. It’s not too hard to come up with 10-12 debit card purchases that don’t take too much away from the credit card rewards.

  5. Bey says:

    There’s just no other place to get a decent FDIC-insured return right now. My RC account is now down to 3.05% APY but that’s on a balance up to $50K with only 8 transactions – signature or pin. I only use the card at my local grocery store, and build points for gas at their pumps to boot. You have to have the discipline to know when to use the debit card for a small transaction as opposed to using a rewards CC for a bigger kick, but in this economy you have to pull out all the stops.

  6. zapeta says:

    My account is currently paying 2.51% up to 25k balance (just dropped from 4.01% in December). I have to do 10 debits, have direct deposit or electronic transactions, and get e-statements. I find its easy to get the 10 transactions each month without doing anything stupid like buying 10 packs of gum one at a time. I just use it when I make a purchase and the total is under $20. I don’t lose out on a lot of rewards and I only make debit purchases until I reach the 10 I need and switch back to the credit cards. 3.75% is a good rate but a lot of banks have made cuts lately so it is likely that more are coming.

  7. JC says:

    My rewards checking pays out 2.5% on balances up to 25k; this is my emergency fund so it works out well. I do have to to 12 debit (POS) transactions a month so I basically use my debit card only at Sams’s club since they don’t accept Visa anyways. I usually get about 12 purchases at Sams including gas fill ups. I use my rewards visa on all other purchases to get 2% cash back on everything else.

  8. Jon says:

    My credit union rewards checking pays 4% on up to $25,000 and 0.5% above that. Of course, a couple of years ago it was 6% on up to $50,000.

  9. Karl says:

    @fairy dust, there is an online service that does exactly what you describe. It’s called MicroMaximus, and it helps people to manage their reward checking account transaction requirements.

  10. So far I like my checking account with PerkStreet. It’s giving me some great perks (cash back) and is hassle free for the most part.

  11. eric says:

    My RC’s rate been going down. Actually they just informed me not too long ago of another decrease. Still better than nothing but it feels like more effort now.

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