Read the full original blog post here.
Ken’s methodology for choosing the top checking accounts
As I was deciding on my top five checking accounts, I became disappointed in the rates from the standard checking accounts. The few internet banks that do offer checking accounts have not been raising their checking account rates as interest rates have been rising in the last couple of years. These include Ally Bank, FNBO Direct, Bank5 Connect, and Alliant Credit Union. Thus, I decided to focus on high-yield reward checking accounts that are nationally available.
High-yield reward checking accounts offer a high interest rate on balances up to some cap if certain monthly activity requirements are met. The primary activity requirement is debit card usage. To qualify for the high yield, between 10 to 20 debit card purchases are typically required. If the monthly activity requirements are not met, only a low base rate is earned for the month.
Most reward checking accounts, and all Kasasa Cash accounts, are free checking accounts that have no monthly service fee even if the monthly activity requirements are not met. In my top checking account picks, I decided to not only focus on interest rates, but also monthly service fees. I excluded any checking accounts that have monthly service fees.
Not only is a high interest rate important, but the high rate should not be limited to only a small balance. All reward checking accounts have balance caps. Only balances under the cap are eligible for the high yield. The portion of the balance over the cap earns a much smaller yield. Reward checking caps range in size from $5k to $50k. I decided to require a cap to be at least $25k.
TAB Bank just started offering its reward checking account, the Free Kasasa Cash Checking, a few months ago. Even though it has a short history, I decided to include it since its rate and balance cap are so high. With a 4.00% APY for balances up to $50k, TAB Bank Kasasa Cash Checking is the best reward checking account that’s nationally available.
To qualify for the top rate each month, the customer must make at least 15 debit card purchases, with a $5 minimum amount for each purchase. In addition, the customer must make at least one direct deposit, ACH payment, or bill pay transaction.
In the account disclosure, the bank warns that they expect the account be used as the customer’s primary checking account. The bank expects the debit card to be used frequently throughout each month and for transaction amounts to reflect a wide dollar range.
Meeting these requirements also entitles the customer to receive automatic refunds up to $15 per month for domestic ATM fees charged by other ATM owners.
The TAB Bank Free Kasasa Cash Checking has no monthly service charge, and there is no minimum balance to open the account or to qualify for the top rate.