High interest checking accounts question

[Mulligan]

On the advise of comment here a few months ago, each month I try to find a way to increase investments or decrease expenses. This month I have been looking at establishing an account at a nearby bank that has interesting program. They pay 4.01% monthly interest on checking account balances up to $25,000, provided this is done: 1) One direct deposit. 2) 10 debit transactions 3) One online bill pay. Plus they will give you 25 cents cashback for every signature debit card transaction minimum 20 a month with maximum payback of $25 a month.
My question is do any of you engage in this type of activity to get higher interest and cash back, or is it too much of a PITA to bother. I have never played this "game" before, so I would have to change a few hanits. Seems like I could make some decent safe money and treat it like a 25,000 CD paying 4%. I havent online bill paid before and rarely use my debit card ,though I use my CC. It looks like I would have to break up some of my purchases as I tend to get everything at once. This appears to be a lot better payback than my CC cash back. They also pay 2.5% on an HSA account which I will probably transfer, too since I'm only getting .7% at my current HSA.
I must add that I have current checking account that pays next to nothing, and my savings account is no better .05%
Any thoughts or success stories doing this?

 

[powerplay]

I don't do any of those things cause I feel it is a big PITA and what happens if you fail to have the required number of debit card transactions in a given month.

 

[Mulligan]

I don't do any of those things cause I feel it is a big PITA and what happens if you fail to have the required number of debit card transactions in a given month.

On this one, there is no penalty, but it reverts to .02% for that month, if you dont meet the requirements. But like you said, if its a PITA, and most people dont do it, or they rarely meet requirements, it probably isnt worth the time setting it up.

 

[ziggy29]

On this one, there is no penalty, but it reverts to .02% for that month, if you dont meet the requirements. But like you said, if its a PITA, and most people dont do it, or they rarely meet requirements, it probably isnt worth the time setting it up.

And these days, the yield is pitiful regardless. Whenever I see that commercial advertising an account with interest "5 times the national average", I think: so what? 0.10% instead of 0.02%? Yeah, I'm really excited about that 0.08%...

 

[Mulligan]

And these days, the yield is pitiful regardless. Whenever I see that commercial advertising an account with interest "5 times the national average", I think: so what? 0.10% instead of 0.02%? Yeah, I'm really excited about that 0.08%...

Ziggy, would you bother with doing the above scenerio for the 4% or is it too much work for the effort? It would get $1000 in yearly interest plus cash back, too if you played the game correctly.

 

[JPatrick]

Sounds reasonable to me, but what all qualifies as a direct deposit?

 

[BillNOVA]

what bank is it?

 

[ziggy29]

Ziggy, would you bother with doing the above scenerio for the 4% or is it too much work for the effort? It would get $1000 in yearly interest plus cash back, too if you played the game correctly.

I might but I'd also wonder how long it would last.

 

[braumeister]

Sounds good to me and I would probably go for it.

 

[Mulligan]

what bank is it?

Its a local bank area bank in MO. I have a friend who is a member and said that it has been this way for several years and was told they had no plans to lower it, or the HSA 2.5% either.

https://www.fcnbanks.com/go/personal/checking

 

[grumpy]

And these days, the yield is pitiful regardless. Whenever I see that commercial advertising an account with interest "5 times the national average", I think: so what? 0.10% instead of 0.02%? Yeah, I'm really excited about that 0.08%...

Ziggy,

Actually that ad is for Capital One Banks high yield checking account. I have one. It pays 1.0% not .02%. I also have a Discover Bank savings account paying 1.05%. Combined, these accounts have earned over $2,000 for me this year. With many other investment vehicles having negative returns, I am quite willing to take advantage of such rates.

 

[Dimsumkid]

On this one, there is no penalty, but it reverts to .02% for that month, if you dont meet the requirements. But like you said, if its a PITA, and most people dont do it, or they rarely meet requirements, it probably isnt worth the time setting it up.

Unless I'm missing something, on the link you provided, there IS a penalty, check the * fine print. You pay a service charge and your interest drops to 0.01%, not 0.02%.


*If requirements are not met, the entire balance earns 0.01% Annual Percentage Yield and a $2.00 service charge will be accessed. Fees could reduce the earnings on this account.

 

[Animorph]

I'm not rushing out to get one of these accounts, so I guess it's not worth it to me. But it doesn't sound bad if you're already close to doing what they require, or have a plan that makes it easy. Direct deposit is automatic once set up. For the BillPay you can set it up to automatically send you a check for $10 once a month. I did that with E*Trade, which required two bills paid. So can you figure out how to do the debit transactions? I always pay for groceries by debit, but I might have a hard time coming up with more than that.

 

[Dreamer]

I have had 2 of these type of rewards checking accounts for a while now. Our rates started at 4.01 up to $25,000 then went to 2.51 and just this month went to 2.01. I have to do 12 debit transactions per account, one automatic bill pay and access my account online monthly. They do not offer new accounts for the rewards checking account. It has been worth it to me in the past, but we shall see about the future. I did not meet all of the requirements for 1 of the accounts one month, but they do not charge, only lower the interest rate to next to nothing. I will go get gas and do 2 transactions, one for each card. My DH would never do this, but so far, I don't mind. I wish that I could find some decent rates without having to play these games. Maybe I will check out the Discover Card for savings.

 

[Mulligan]

Unless I'm missing something, on the link you provided, there IS a penalty, check the * fine print. You pay a service charge and your interest drops to 0.01%, not 0.02%.

*If requirements are not met, the entire balance earns 0.01% Annual Percentage Yield and a $2.00 service charge will be accessed. Fees could reduce the earnings on this account.

ya, I caught that too. Im getting old and got it mixed up when reading about my current checking account rules. I would have to maintain it too because I have some automatic investments coming out that I wouldnt want to change because of all the security hassle involved with changing it. It doesnt appear too many people so far are interested in this. I will have to make sure, Im up to the challenge. My friend says he will split his order in 2 at walmart to double the transactions. I guess that is one way..... I guess you could also hit 3 gas pumps at the same station to fill up too!

 

[Dimsumkid]

ya, I caught that too. Im getting old and got it mixed up when reading about my current checking account rules. I would have to maintain it too because I have some automatic investments coming out that I wouldnt want to change because of all the security hassle involved with changing it. It doesnt appear too many people so far are interested in this. I will have to make sure, Im up to the challenge. My friend says he will split his order in 2 at walmart to double the transactions. I guess that is one way..... I guess you could also hit 3 gas pumps at the same station to fill up too!

I've read about people that have these accounts try to do all the min. purchase requirements in one trip when filling up the car. $1 fill up, stop, repeat until done. Of course, you're limited if the gas station prevents too many transactions one after another.

I don't like doing debit card transactions at all, these cards have more horror stories attached to them with a lot less security if your card gets compromised compared to a credit card. We refuse getting debit cards when we open up bank accounts now.

 

[Koolau]

I absolutely despise companies that make you play such games to get their good rate. If I ever had any "loyalty" to a bank (or air line or credit card company or discount store, etc. etc.) it is ALL gone now because of this shabby treatment of their customers. I've been burnt on most of the "games" they offer, so I rarely play anymore. I understand that they need to make money, but these games are "rigged" (in my opinion) to get what THEY want (your direct deposit, etc. etc.) but not to actually have to pay you. All you have to do is screw up one thing and you lose it all. If I want to play games (and I don't) I'll go to Vegas where they are at least open about trying to take your money when you play their game.

To the original question: If one is certain they can play the game by the rules and the rules won't be changed on them, go for it! 4% in this day is a good rate. YMMV