Avoiding the Tripwires of Rewards Checking


Banks aren’t always as forthcoming as they should be when it comes to checking rewards programs. Whether it’s not making enough PIN-based purchases or missing a deposit minimum, banks will withdraw that big rate if you don’t play by the rules. With that threat in mind, here are five tips to ensure that your rewards rate remains in good standing.

Before we start, know this — if you play by the rules you can really make out with checking account reward deals. Some banks are offering as high as 5% APY on such deals, which compares well to the industry average for bank checking accounts and for bank certificate of deposit accounts.

Right now, the BankingMyWay Rate Tracker has the former at 0.019% and the latter at 0.713% for a one-year CD. Plus, your account is FDIC-insured — not a bad deal as long as you play ball with your bank.

Banks say they can offer the higher rates because they save money when you make direct deposits or use your bank debit card.

To stay eligible for a great rewards checking rate, try to avoid these tripwires on your rewards checking account:

Don’t forget to make that direct deposit. Any rule on rewards checking starts with reading the fine print. And reading the fine print often starts with having to make at east one direct deposit per month. Make sure to check with your bank to see if you need to make more. If you miss, your great reward rate will likely fall off a cliff.

Make the minimum signature debit card transactions per month. Most bank checking account reward deals usually mandate a fixed number of signed debit card transactions, and some can go as high as 10 per month. Again, check with your bank to see what your minimum limit is. If you don’t hit it, your rate will suffer.

Note the grace period — but honor it. Many banks will give you a one-month grace period before the account requirements kick in. That’s a good thing — you’re not rushed into having to handle several new bank account requirements and you still get the great rate. Just make sure that once the month ends, you get on the horse and meet those requirements before the end of the second month occurs.

If you’re running late, use your PIN. Some banks allow for both PIN-based and signature-based debit card payments to qualify for the great APY. But if you’re running out of time and need to make a debit card purchase at the end of the month, make a PIN payment over a signature one. Banks usually post PIN-based debit purchases at the end of the same business day you made the purchase. But signed purchases may not hit your account until the next business day — or even later.

Use a local bank or credit union. Often local banks are easier to work with than the big behemoth and their all-too-clinical customer service phone operators. If you have a problem with your rewards account, the face-to-face option with your local bank usually means you’ll be cut a break.

No doubt about it, bank checking rewards accounts are a great deal — just be prepared to jump through some hoops to get it.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.

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