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I was pointed today to the "Maximum Earnings Banking" account from Southern Community Bank and Trust, which says it has a 6% APY — basically unheard of these days, especially with all of the rate cuts of the past few months.
Wow - that sounds pretty good. Online bill pay, no maintenance fees, no minimums, and national ATM use.
So what's the catch?
You have to use your debit card at least 10 times per month (not a problem for me, since I use it for everything). You need direct deposit (always a good idea), $100 to open and use e-statements instead of paper ones.
Honestly, I'm not sure if any of those really classify as catches.
But call me skeptical — something doesn't seem right.
Does anyone use this bank and trust? Can you share your experiences and whether or not you recommend it?
These reward checking accounts have been popping up across the country over the last year. Their rates have been dropping, but they haven't fallen as much as the online savings account rates.
There's another big catch besides debit card usage. That's a balance cap that can earn the top yield. The typical cap is $25,000.
I have an overview of these accounts and a discussion about their future @
http://bankdeals.blogspot.com/2007/11/high-yield-reward-checking-account-news.html
Like the above poster commented, the high rate checking products are slowly showing up all over the country and do seem to be holding up well. A few have dropped, but most are keeping their rates up.
I just took the plunge on a local deal through a credit union that I have a couple cd's with. The rate is lower than some national ones (5%) and their max deposit for the high interest is lower than most (15,000). They have however, kept their rate unchanged for almost 8 months. If it goes well and I can get into the habit of using my debit card enough to get the high rate, I may look into an out of state deal that pays more.
I do think these products are a very good deal for people who do most of their purchasing and bill paying electronically. Banks seem to make money on ACH transactions and they say they retain customers better with these accounts, so they can afford to pay the bigger dividends.
Only time will tell if they will continue, but they are the best thing going right now for savers with less than 25,000 socked away.