Consumers Credit Union has a free rewards checking account in which depositors can earn up to 5.09% APY on balances up to $10,000. There are no fees with the account and the credit union will refund fees from other banks' ATMs when the reward requirement balances are met. Unlike many credit union offers, this account is available nationally. Anyone can join the credit union and open it, and access is nationwide due to the credit unions participation in a co-op program. The only requirement to become a member of the credit union is to first join the Consumers Cooperative Association by paying a one-time fee of $5.00. The downside to the account is the rather lengthy list of actions you must take to get the rate.
Here's how the rewards checking account works:
To earn the 3.09% APY*, and ATM refunds complete the following requirements:
- Complete at least 12 Debit/Check Card point-of-sale purchases (transactions must be made without using your personal identification number (PIN) to count toward the minimum of 12 and must post and clear your account on or before the last day of the calendar month)
- Each calendar month, one direct deposit OR one ACH debit OR pay one bill when using Consumers Credit Union's free online bill payment system must post and clear your account on or before the last day of the calendar month
- Access Online Banking at least once each calendar month
- Receive eDocuments (enroll and accept the disclosure)
To earn 4.09% APY*, and ATM refunds perform the following each qualifying cycle:
Meet the requirements to earn 3.09% APY . . . then add:
- Complete 12 CCU VISA Credit Card purchase transactions, NO MINIMUM purchase requirement.
To earn 5.09% APY*, and ATM refunds perform the following each qualifying cycle:
Simply meet the requirements to earn 3.09% APY . . . and:
- Spend $1000 or more in CCU VISA purchase transactions, regardless of the number of purchases
The 5.09% APY is the highest rewards checking rate in the country according to our database. Using the BestCashCow Savings Booster Calculator, I calculated that the average depositor could earn an extra $1,972 over five years putting their money into this account versus keeping it in a traditional 0% checking account.
Compared to Rewards Credit Card
The question to ask is does it make sense to open a rewards checking account and earn the 5.09% on balances up to $10,000 or to use a rewards credit card for making purchases? In order to get the 5.09% rate, you will have to spend $1,000 or more on your CCU Visa card in addition to the 12 debit card purchases you must make every month. If you did this and kept the maximum of $10,000 in the account, you would earn $500 in interest over the course of year.
Now, let's assume you make the same purchases using a reward credit card. The redemption on a rewards credit card can be anywhere from 1-2% of card spending. Assuming a midpoint of 1.5%, you would need to spend $33,333 on your credit card to earn $500. So, if you plan to put more than $33,333 on your credit card, you should stick with the credit cards rewards account. If you plan to spend less than that, the CCU offer will come out ahead.
About Consumers Credit Union
Consumers Credit Union is headquartered in Waukegan, IL and has $584 million in assets, making it a mid-sized credit union. It has six branches in that general area. The credit union participates in the Co-op ATM and branch network, allowing you to use branches close to your location as if it were an actual branch of Consumers Credit Union. There are nearly 5,000 branches, 2,000 self-service locations, and 30,000 ATMs in all 50 states. I checked and there is a participating branch 1.2 miles from my location even though I live hundreds of miles from an actual Consumers Credit Union branch.
In addition, the credit union offers mobile banking and remote check deposit through a mobile device, making it easy to deposit funds.
If your transaction pattern fits the list of requirements outlines above, and you don't want to participate in credit card rewards program, then this account is worth a look.