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Reward checking accounts are generally offered by local community banks or credit unions. They offer a significantly higher rate of return in exchange for maintaining a minimum balance, using direct deposit, or doing a certain number of online or debit card transactions.
These accounts, however, are not good for those seeking to deposit large amounts of money as most accounts only earn the advertised rate to a certain low maximum deposit (the APY limit).
Reward checking deposits in community banks are insured by the FDIC while deposits in credit unions are insured by National Credit Union Administration. Unlike the larger commercial banks, most local banks and credit unions are doing well despite the economic crisis. They are offering competitive rates and are continuing to lend.
The following chart lists only those rates that are available nationally and provided courtesy of the BankDeals Blog.
Know a better reward checking account rate? Let us know.
| Bank/Reward Checking Account | APY** |
APY Limit |
Requirements |
Your Questions and Thoughts |
Bank of the Sierra |
4.51% |
$25,000 |
|
Post/read reviews of this bank |
Commonwealth Bank & Trust Company |
4.50% |
$25,000 |
|
Post/read reviews of this bank |
Royal Bank of Missouri |
4.30% |
$25,000 |
|
Post/read reviews of this bank |
Coulee Bank |
4.04% |
$25,000 |
|
Post/read reviews of this bank |
Heartland Community Bank
|
4.02% |
$30,000 |
|
Post/read reviews of this bank |
Evantage Bank
|
4.00% |
$10,000 |
|
Post/read reviews of this bank |
Bank of the Wichitas
|
4.00% |
$10,000 |
|
Post/read reviews of this bank |
AmericaNet Bank
|
4.00% |
$10,000 |
|
Post/read reviews of this bank |
Bauer Soundness Ratings. Bauer Financial periodically assesses the health of the nation's banks and credit unions using data reported to the government, its annual reports, and more. An explanation of their star system can be read here.
** For a complete definition of Annual Percentage Yield (APY), please see the Financial Terminology section.
Reward Checking Transaction Minimums
The most important factor to consider when opening a reward checking account is whether you will do the transactions necessary to get the reward rate. If you frequently use your debit card, bank online, or don't mind having a paycheck, social security payment or some other electronic credit or debit attached to the account then, it makes sense. But if you don't meet the monthly requirements, the interest rate on the account plunges to below 0.5%.
Customer Service
The other factor to consider is how comfortable you are with the bank's customer service. While all of the accounts listed can be opened nationally, if you live in Maine and have a problem with a bank in Montana, will you get prompt customer service?
Reward Checking ATM Fees
ATM fees are another thing to consider. If you're a heavy ATM users, make sure the bank reimburses ATM fees or your extra return may get eaten.
