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Best High Interest Reward Checking Account Rates

Published 4/8/09 (Modified 3/9/11)
By MoneyBlueBook

Updated Review Of High Yield Reward Checking Account Deals Below

Remarkably, despite a struggling economy and lower interest rates across the board, high yield reward checking accounts are still touting bank rates as high as 5.50% APY in certain locales. At their peak, the best reward checking account offers were topping off at an astounding 6.00-6.50% APY. Definitely nothing to sneeze at. However, before I get started on my usual long winded blog post about the financial possibilities and benefits of high yield reward checking accounts, let me say a few things up front. No, you're not going to be able to roll your interest rate earnings into a mint or become a millionaire overnight. But if used properly in tandem with other interest chasing pursuits, high interest checking accounts have the potential to really give your otherwise idle savings a big boost. The associated interest rates with these special bank reward checking accounts are often higher than the top savings account rates, the best money market rates, and even the highest bank CD rates.

Demand A Higher Interest Rate For Your Checking Account Cash

Personally, I don't usually keep a ton of money in my checking account to begin with, preferring to stash them in hassle free high interest producing assets like savings accounts and certificate of deposits. However, because check writing and convenient ATM access are still daily necessities in quite a few situations (example: not all apartment landlords allow tenants to pay their rent via credit card), most of us are still pressed into keeping a sizable amount around for such purposes. But unless you have a better storage solution for your on-demand cash, you might as well milk the most out of it while waiting for such checks to clear.

The vast majority of people don't actually realize how pitifully low their checking account interest rates really are, particularly if they have accounts with big name banks like Citibank, Bank of America, or Wells Fargo. Despite their instant brand recognition, these popular banking institutions are notorious for shelling out ridiculously low rates - frequently only offering pennies on the dollar - in the neighborhood of 0.05% - 0.25%. With the way most banking transactions and bill payments are made online these days and with the way most online banks are offering reimbursements of customer ATM fees, there is no need to tolerate such paltry token interest payments any longer. A growing number of online banks and credit unions in out of the way places are leading the charge when it comes to offering its customers competitively high interest rates in exchange for their bank checking business.

However, to get those top high yield reward checking account rates - there is a catch - several in fact. Reward checking accounts often demand much more stringent and active account maintenance requirements than other bank account types like savings and even money market accounts. Most of the highest paying reward checking accounts require users to engage in fairly heavy debit card usage and agree to certain direct deposit activity pre-conditions - all designed to instill customer loyalty with that particular bank. Many of those hassling requirements are discussed in greater detail below, but fear not - most if not all can be overcome and easily met with some practical adjustments in your daily banking practices and changes in your tool of choice when making card based purchases.

List Of The Best Banks With High Interest Reward Checking Account Offers

Bank/Credit Union
APY RateMaximum Balance
First State Bank5.03%$25,000
Focus Bank4.51%$25,000
First Arkansas Bank & Trust 4.44%$50,000
Olmsted National Bank4.11%$25,000
Coulee Bank4.04%$25,000
Heartland Community Bank4.02%$30,000
Farmers & Merchants Bank4.01%$50,000
Charter Bank4.01%$25,000
Bank of the Wichitas4.00%$10,000
AmericaNet Bank4.00%$10,000
Evantage Bank4.00%$10,000
First New England Fed Credit Union3.65%$15,000
First City Bank3.51%$50,000
Malvern Federal Savings Bank3.50%$35,000
Connexus Credit Union3.21%$25,000
CBDirect Bank3.00%$250,000

Meeting Reward Checking Account Requirements To Get The Highest Rate

Compared to savings accounts, bank CD deposits, and money markets - checking accounts, with all of their unlimited check writing privileges and unlimited ACH transfer benefits, are much more expensive for banks to operate and maintain. High yield checking accounts compensate for the extra cost of offering higher interest rates by requiring reward checking account holders to jump through extra complex debit account activity hoops and to satisfy higher monthly maintenance thresholds - in the hopes of turning them into loyal and dependent banking customers.

The requirements for each high yield reward checking account differs from program to program, but typically, certain requirements must all be met for the customer to maintain the highest premium interest rate yield. If���� all of the requirements are not met, the customer falls into a lower earning reward checking tier. Some of these requirements include a certain number of debit card usages per month, mandatory participation in online bill pay and direct deposit, and maintenance of a certain minimum monthly balance.

One thing you'll notice among these high yield reward checking account offers is that most of the headaches and trickiness associated with their use are focused around the debit card transaction requirements. Many reward checking accounts require at least 10 or more debit card transactions a month to continue receiving the highest interest rate. Because not everyone is a habitual user of debit cards, it's not always easy ditching the reward credit cards in favor of bank debit check cards. Ultimately, the banks that offer these lucrative checking account packages make money by profiting off of the debit card transaction fees and other charges that they hope you will accrue and rack up over time.

When it comes to meeting the debit card usage requirement, you certainly have options at your disposal. One is to simply use your bank debit card for all of your daily purchases and transactions as you would normally use your credit cards for. Another option is to purchase a large number of small denominational items (25 cent or $1.00 candies for example) once a month and spend a few moments at the self checkout aisle at your neighborhood supermarket and swipe each item in as separate debit card purchases - up to the required monthly number necessary.

Another interesting way to meet the debit card transaction limit is to make multiple debit card powered PayPal donations to charities of your choice up to the required number of debit card transactions. With minimum donations of $1.00 each, you should be able to hit your limit with ease. Not only does your chosen charity get a few bucks worth of donations, you get your high interest rate yield, along with payments that are also deductible as charitable donations come tax time (essentially hitting 3 birds with 1 stone).

Local Banks Are More Convenient, But Nationwide Online Banks Offer Better Deals For High Interest Reward Checking

In terms of ATM and branch accessibility, the emergence of ATM fee reimbursement programs and improved online customer support have greatly closed the gap between online banks and brick and mortar institutions. However, with all things considered, it's generally still a better idea to go with a local bank or credit union whenever possible, particularly when it comes to checking accounts. Unlike savings accounts and CD's which tend to see much more limited transactional activity in comparison, checking accounts are by their very nature, much more heavily used on a day to day basis.���� Because of their heavy involvement in ATM withdraws, deposits, check writing, and bill payment activity, they are more likely to demand a greater degree of customer service attention than more static savings based accounts. In the area of dispute resolution, it's almost always better to have the option of speaking to a live customer service rep face to face at a local branch, than trying to explain your problem solely through email or phone.

However, it's a trade off. What you lose in the way of convenience with an online-only or out-of-state bank, you are likely to gain back in the way of much higher interest rate yields for your willingness to accept a measure of inconvenience. Remember, the best reward checking account offers are not always found with banks that are locally based. Many of the best offers are found with fully FDIC insured banks that are frankly no names and located in the booniest of boonies.

Disclaimer: Discover is a paid advertiser of this site.
Reasonable efforts are made to maintain accurate information. See the Discover online credit card application for full terms and conditions on offers and rewards.

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