comments
Savvy Consumer Talks Reward Checking
 Print
|
While at Disney, I had a chance to chat on the phone with Teresa McUsic, Savvy Consumer columnist for the Dallas-Fort Worth Star-Telegram, about reward checking accounts. It was wonderful to see that conversation blossom into a post about how saving can be lucrative, an article in which she explains how reward checking accounts work.
If you were wondering whether reward checking accounts were a scam, wonder no more because she spoke with Mike Monroe, president of Legend Bank and one of the banks offering a high yield reward checking account called the Ultimate Checking account (5.13%). They’ve offered it since April 2007 and hasn’t lowered the 5.13% rate:
“It’s not a bait-and-switch account,” he said. “What it costs the bank to process a check item, if the customer uses their debit card instead, we’re able to turn around and pass that savings on to them.”
I’ve talked about high interest reward checking accounts, worth checking out if you are unfamiliar with the concept.
{ 7 comments, please add your thoughts now! }
Related Posts
 By Jim |
 Stumble It! Bookmark reddit.comTags: Reward Checking Accounts Mar 07, 2009 | Read more in Banking |
Like this article? Get all the latest articles sent to your email for free every day. Enter your email address and click "Subscribe." Your email will only be used for this daily subscription and you can unsubscribe anytime.
5% does seem incredibly high for a checking account. They must be lending that money out for that at more than that.
I’d be a little worried about a bank offering that much right now. The prime borrowing rate is very low so they shouldn’t have to create such steep incentives to get people to open accounts.
I don’t think these banks are using “reward checking” simply as a ploy to get people to open accounts. These kind of accounts really target specific people, and have been deemed legit for a long while now.
I can understand your concerns about the high interest rate “promises” per the whole Madoff and Stanford ponzis, but keep in mind, most of these reward checking accounts have variable rates.
I’ve been talking up Reward Checking accounts for a while now. While I STILL haven’t taken the plunge, I do plan to in the next few weeks. I’ve watched my HYS account’s interest rate drop and drop and drop, and its quite discouraging. One has to wonder if there is a catch with these accounts, but everything I’ve seen simply requires that a debit card be used a certain # of times per month. Sure you lose out on credit card rewards, but for 5% interest in the current economic situation, you can’t go wrong!
So for those that have these accounts, do you think you spend more so that you’ll hit the debit transaction limits?
I’ve actually got 2 of these accounts with local credit unions (If you go over $25,000/account the rate drops), and I’ve been very happy with them. I don’t seem to spend more because of the minimum number of transactions, but I just switched a lot of cash and reward CC transactions I was already making over to these cards. You do need to be very careful tracking your transactions; I usually make sure I have enough transactions 2 days before the end of the month to be safe. My accounts also require that you have a direct deposit, online account access, and online statements for the account, so be sure to check all the rules!
I find these accounts to be either a great deal or a waste of time, depends on the bank. One of the best ones I’ve seen so far is from Coulee Bank out of Wisconsin. They offer 5.01% APY and it is available nationwide, which is one of the best parts. They seem to have great service as well. Any others above 5%? Would like to know, thanks!
You know, I haven’t written a check for years. I never ordered checks for both checking accounts that I now have had for quite some time since I have had absolutely no reason to write a check. The rare occasion that I do calls for a teller or certified check anyway.
I’d totally do a high yield account if the limitations are within my normal way of doing business. I absolutely like the idea of passing on savings back to me in the form of a high interest.