6.01% APY on your Checking Account! Wait, it is too good to be true.

So… this seemed too good to be true. I just found out, it is. The offer is only available for people who live in the bank’s county in Illinois. So much for 6% APY. There’s nothing like that around here!

———-
I was listening to my favorite talk radio program – The Ray Lucia Show – yesterday, and a guy called in to ask about a 5% APY checking account he saw advertised on the Internet. He wanted to know if it’s legit.

Since I haven’t seen any set APY rates of 5% since three years ago, when I saw those rates on a CD, I was intrigued. The “Brain Trust” team at the radio station did a little research and found out that, indeed, this offer was through an FDIC insured bank and it was legit. Of course there was a catch – you have to 1, have direct deposit and 2, use your debit card at least 10 times per month/billing cycle.

That left me with the question – what happens if you don’t. So I did some research online and found that many smaller banks are offering up these high interest checking accounts to lure in new customers. Smart for them.

I just opened a 6.01% APY (!!!) checking account with First Robinson Savings Bank. Read through the fine print, and so far it seems pretty straight forward. The rewards are only on cash under $25,000 — but that’s ok, I’m not ready to save more than $25,000 in a checking account anyway. You do need direct deposit (I’ll have to get my work account to switch over from my Bank of America – thank goodness I’m now a full time employee!), and you do need to make 10 transactions a month (I could buy gum ten times and that’d be fine.)

Some other banks are offering similar rates, more in the 5% range…

Union State Bank is offering 5.01% APY with similar rules and AmericaNet is offering 5.25% APY.

I’ll admit, I’m a little nervous opening up a bank account at a small bank in some random Midwestern state (not that I have anything against the midwest!) but these rates might not be too good to be true, just too good to pass up.

Given that my Chase Freedom card rewards are about $20 a month, on month’s I spend a lot, I figure I could probably make a similar amount in this checking account and not risk forgetting to pay my bills on time and getting hit with late fees.

From the fine print, it looks like if you fail to make your 10 transactions per month you just get only .25% apy for that month – so basically, you don’t get any interest. But you can start over the next month.

Considering I barely ever use cash, my debit cards always get a lot of action. This sounds like a good way to earn at a good rate while also starting to exit Bank of America. Right now I have a checking account, savings account, and CD at BoA. If this 6.01% rate turns out to be legit, I’ll move my CD over there once it expires, and possibly move the cash I’ve been saving at ING there too — since it’s only earning like, 2%.

Have any of you opened up / used one of these high interest checking accounts before? Any horror stories I or my readers should be aware of?

  • Fabulously Broke

    That is AMAZING.Wow. If only I lived in the States.

  • Anonymous

    Great post. I like that you shared your experience with the Brain Trust, they are smart guys!

  • Anonymous

    My checking account at Community Bank of NV (brick & mortar) pays 4.0% if you:• have 1 direct deposit• pay 1 online bill pay• sign up for e-statements• 10 debit transactions per monthI've had this account since September and it's like Christmas at the end of every month, getting all that interest in thanks for doing what I'd be doing anyway.

  • Emily

    You can research and compare checking accounts using CheckingFinder (www.checkingfinder.com). Type in your zip and look at rates and requirements for high yield checking accounts at select community banks nationwide! They have online banking too. If you find an account you like, you can sign up for free. Community banks continue to offer higher yields on short term deposits to serve as economic engines.

  • Anonymous

    These types of accounts are legit. I find them wonderful to use, and open multiple "Rewards Checking" accounts at a single bank, if allowed. But the rates can fall. I am currently moving my $$ because the bank that was paying 4.61% (up to $50,000) dropped it to 1.24%. However, I found another that pays 5.25% up to $25,000. Not bad for these times!

  • Emily

    P.s. I just realized it may not be clear from linking the URL in my name, but I posted on behalf of CheckingFinder. Just wanted to make it clear. :) Hope an additional source of research helps!Emily (CheckingFinder)

  • Azahar

    I found a great site that lists all different banks that offer up to 6% in reward checking. I found this tool helpful for me on CheckingFinder.com, the website describes what rules need to be followed, like to just to use the debit card, online banking, or use direct deposit.I’ll pass it on:Bank Rates:First Robinson Savings Bank – Robinson, IL6.01Southern Missouri Bank & Trust6.01Bank of Ripley – Ripley, TN5.26Communication Federal Credit Union – OK5.25LA DOTD Federal Credit Union – Denham Spring, LA5.25Keystone Bank – Auburn, AL5.15Connexus Credit Union – Wausau, WI5.15Altra Federal Credit Union5.05Farmers and Merchants – Nashville, IL5.05Community State Bank – Poteau, OK5.05First State Bank – Kansas City, KS5.03State Employees Credit Union – Santa Fe, NM5.02Grand Bank of Texas – Grand Prairie, TX5.02Harbor Credit Union – Green Bay, WI5.01Malvern Federal Savings Bank – Paoli, PA5.01Union State Bank – Everest, KS5.01United National Bank – Cairo, GA5.01First Banking Center – Lake Geneva, WI5.01Noble Bank & Trust – Anniston, AL5.01The Community Bank – Brockton, MA5.01Bank of Little Rock – Little Rock, AR5.01Community Bank of Pleasant Hill – Pleasant Hill, MO5.01Community Bank of Raymore – Raymore, MO5.01Olmsted National Bank – Rochester, MN5.01Royal Banks of Missouri – St. Louis, MO4.78Texas Citizens Bank – Pasadena, TX4.76Courtesy of BancVue.Enjoy!~Azahar

  • Sandy

    I linked over to your list here from my blog. I think you have the best listing of interest rates that I have seen in some time. If you're like me and don't have 10K to invest in a CD then these are the best rates that many of us will see on our money.

  • Anonymous

    Hello,If any one is a teacher out there, California Credit Union offers a summer saver program with monthly deposit over 300.00 and you earn 6%. (It is like a ten month cd in that they hold the money for the ten months.) Regular savings account though is .25%.https://www.californiacu.org/educators/summer_savings.html

  • Anonymous

    Coulee Bank offers 5.01% on their nationwide rewards checking. Free at http://www.CouleeBank.net