PenFed Access America interest bearing checking

[RunningBum]

I know there are other PenFed customers here. Recently I saw something about "Access America" checking which pays 0.20% interest up to $20K and 0.50% interest up to $50K. This is better than their regular or MM savings rates, so if you keep a lot of money there you may want to upgrade. I searched and didn't see anyone else post about this yet.

Upgrading from existing checking is easy. Go to the "products and rates" tab, then Checking (or just click on https://online1.penfed.org/PenFedOnline/Forms/ProductsAndRates/Checking.aspx ) and click on Open. It will recognize if you already have checking and ask if you want you to upgrade. Click yes, and that's it. No new cards or account number.

I think you need to keep the balance above $500 to avoid fees. Not sure if that's different from before. Check for yourself to make sure.

 

[braumeister]

Did you notice that a minimum balance of $5K is needed in order to earn even the 0.2% interest rate?

That's quite a bit more than I routinely keep in a checking account.

 

[audreyh1]

There is a HUGE caveat!!!!

Earn dividends with direct deposits of $1,000 or more and a daily balance of up to $50,000 per statement cycle.

You must have a monthly direct deposit like a paycheck or social security or pension to get any interest paid.

No monthly direct deposit, no interest.

Transfers don't count.

I don't have anything coming in that would do such a deposit, so no interest for me, even though I switched a couple of month ago. I really did not see the second like qualifying the interest.

They sure fooled me! https://www.penfed.org/Access-America-Checking/

I called wondering where my interest payments were - and they pointed out the direct deposit requirements.

 

[RunningBum]

I'm not seeing that. Under "Rates", it shows a table of 0.2% for 0-$19,999. Where is the $5K minimum listed?

I'm not used to keeping too much in a checking account either, but when checking pays more interest than savings, my checking account also becomes my savings account. It also pays more than the Vanguard sweep account.

 

[audreyh1]

You're not going to get any interest paid if you don't have a $1000+ monthly direct deposit (not transfers).

 

[RunningBum]

You're not going to get any interest paid if you don't have a $1000+ monthly direct deposit (not transfers).

OK, though I'm still not seeing anything that clearly says that. They sure weren't very open about it. I wonder if it has changed? I guess I'll see.

Is it worse in any way than the old Open Access account I had before?

 

[RunningBum]

OK, I see it now, actually pretty clearly. Not sure how I missed it.

"Earn dividends with direct deposits of $1,000 or more and a daily balance of up to $50,000 per statement cycle.1 "

 

[audreyh1]

OK, I see it now, actually pretty clearly. Not sure how I missed it.

"Earn dividends with direct deposits of $1,000 or more and a daily balance of up to $50,000 per statement cycle.1 "

It certainly wasn't clear to me at first and had to be pointed out before I understood. It's presented more as an additional thing rather than a requirement. I didn't understand what they meant at first.

No - without deposits it's not any different from the old checking. If I'd understood their language I wouldn't have bothered "upgrading".

 

[braumeister]

I'm not seeing that. Under "Rates", it shows a table of 0.2% for 0-$19,999. Where is the $5K minimum listed?

I found this on the CU Today website:

Access America has three dividend tier levels. On balances to $5,000, no dividends are paid; on balances between $5,000-$19,999, a dividend of .25% is paid, and on balances of $20,000-$50,000, a dividend of .50% is paid. Those rates are variable and the latter two tiers also require a direct deposit of $1,000 or more.

That was enough to stop me from looking any further.

 

[Gone4Good]

Why not just keep money in an Ally (or similar) on-line savings account paying 1% and transfer money as needed?

 

[braumeister]

Why not just keep money in an Ally (or similar) on-line savings account paying 1% and transfer money as needed?

That's what I've been doing for years. I get 1.01% from Discover Bank and they have always been perfect about transfers in and out.

 

[audreyh1]

Why not just keep money in an Ally (or similar) on-line savings account paying 1% and transfer money as needed?

That's what I do.

 

[RunningBum]

Why not just keep money in an Ally (or similar) on-line savings account paying 1% and transfer money as needed?

Yeah, that's probably the way to go. Sorry for the false hope, folks. Thanks for keeping me honest.

 

[braumeister]

Thanks for keeping me honest.

Not so fast, Buster.

You have to write "I will read the fine print before posting" 50 times on the blackboard.

 

[audreyh1]

Yeah, that's probably the way to go. Sorry for the false hope, folks. Thanks for keeping me honest.

Hey - I just didn't want you to go down the disappointing path I did!

Sometimes the fine print isn't that understandable.

 

[audreyh1]

Hmmm - I got some interest (dividend) paid on my PenFed Access America Checking account this month, and the only difference is that I made a $1000 transfer into it from another bank in the same statement cycle.

So maybe their direct deposit rule is not what I was told and transfers from another bank account do qualify.

Also, my balance is under $3000, so it doesn't seem to meet the tier requirements.

I just had the extra cash transferred recently because this is a backup account in case I had problems with my two primary checking accounts during my overseas trip. (Belts, belts, suspenders and suspenders.)

Further investigation it looks like it's in the ballpark according to the following rates show on my statement:

8/1/16-9/11/16 APY: Daily bal < $20K: 0.50%; Daily bal > $20K, up to $50K, 1.01% 9/12-30/16 APY: Daily bal < $20K: 0.20%; Daily bal > $20K, up to $50K, 0.50%

I earned $0.83. My daily balance was around $2,436 as my deposit and one billpay happened to occur on the 1st day of the statement cycle. Then they had an interesting rate reduction on 9/12/16 - I didn't realize they had gone to those higher rates for a while, because I just remembered the 0.2% and 0.5% rates at the beginning of the year.**

They say the following for the Access America Checking on their data sheet:

*Earn dividends with direct deposits of $1,000 or more AND an average daily balance between $5,000 and $50,000 per statement cycle.

By the $5000 minimum wasn't there when I converted, and is clearly not included in my rate statement above, so perhaps I am grandfathered in no minimum required?

So confusing!!!

** Looks like in May 2016 they increased the rates to 0.5% for balances <$20K and 1.01% for balances >$20K up to $50K. Then dropped back to original on 9/12/16.

Moral of the story - it looks like transfers qualify for direct deposits. I don't know how they would tell the difference anyway, nor why I was told otherwise. Annoying!!!

Am I willing to set up monthly $1000 transfers from other accounts for 0.2% or 0.5% rates? - No, as my other accounts are already paying higher. And that extra cash I transferred in last month is about to be swept back out.