CREDIT UNION

Reward Checking Account

Many people today are struggling with their personal finance, balancing between their checking accounts and savings account. Ultimately having the objective of saving as much as they possibly can and spending the least amount they can. Consumers are questioning themselves every day what to do with their money.  If they want to transfer their funds to save interest in their savings account or to keep it in their checking account to spend or be debited for auto-payments. Consumers are being charged NSF (Non-Sufficient Fund) fee and or overdraft fee. They are forgetting their credit card payment was due, so they are forced to surrender countless of fees. Most people concedes to just leave all their funds in their checking account to avoid those pesky fees, but this is a problem for anyone who wants to save money because most checking accounts don't offer interest rate (some do, but they are at a measly national average of 0.07%). This is a true dilemma for millions of people today. Is there a solution? Sure, you can remind yourself to leave enough funds for each auto-payment transaction, but what if I were to tell you that there is an account out there that pays you high dividends and has all the capabilities of a checking account? Wouldn’t that make life so much easier? No more guessing how much you want to set aside into your savings account. No more compromising your checking account. But is there a such thing? 

Yes, it's called the Rewards Checking Account. A reward checking account is a checking account that offers many more incentives and perks than an ordinary checking account. It typically earns at a high interest rate. Some banks offer reward checking accounts (they may have different names), but they offer at a certain price, meaning monthly fees or require a minimum balance of $10,000 or more to avoid fees. And let's be real here, maintaining $10K is difficult with all those bills due every month and those monthly fees can eat up your interest earnings every month! If you want to avoid those monthly fee reward checking account, I go with Online banking or Credit Union because they are FREE! But not only are they monthly-fee free, they have a much superior interest rate than your brick and mortar banks! That's more money for you!

Credit union best product is their reward checking account. You can earn interest rate just as high as long term bank's CD (Certificate of Deposit) rate! On top of the competitive interest rate, your reward checking account reimburse you ATM fees from other banks' ATMs (most credit union's reward checking account reimburse unlimited ATM fees). It sounds too good to be true, but it's definitely for real! You get the best of both features in one single account! Pay your bills, earn high interest rates and withdraw your money for free!

The Catch

Rewards checking account is a revolutionary product when it comes to banking. It makes our lives much easier especially when you're not juggling between checking and savings account.  There is a small catch though. But it is a whole lot easier than managing two accounts or maintaining a $10,000 balance. The catch is that you need to make a minimum of ten to fifteen check card purchases using your debit card, pay bills, or have an automated clearing house (ACH) transfer/direct deposit, and enroll for online bank statements/online bill pay each month to qualify for the APY rate and the ATM reimbursement fees (more on ATM fees refunds later). It does seem like a lot of activities, but if you think about it, you most likely already do these activities with your current bank every month! Some credit union requirements, however, may be different, so check with your local credit union if interested. Online checking accounts also have similar benefits and requirements. Why store your money in an ordinary free checking account when you can earn a competitive interest rate? There are a lot of checking accounts that are free, but there are few out there that pay you just to let your money sit. Getting paid is a whole lot better than free. Your money should work just as hard as you do, so why not let money make some money for you? There’s not much to sacrifice. However, if you do not meet these requirements, then you will still earn a 0.10% interest rate or somewhat similar, depending on the credit union. Let's recap. Here are four general requirements you must meet to earn the competitive interest rate and receive ATM fees reimbursements. These are just the standard requirements; again, please look over your local credit union requirements, as this is just a generalization. 

• Make 10 to 15 small purchases. You can’t always be stingy about your cash and never use your money. Sometimes, you have to pay a little to earn more. Normally, you have to make 10 to 15 purchases, depending on your local credit union requirements. This is probably the hardest thing to do to qualify for the rate, which is really not that hard to do in a single month. You can buy as you normally would. My personal rule of thumb is that if it is under a dollar, I use my credit union’s debit card. Over a dollar, I use my rewards-credit card because I earn at least a penny on a one percent cashback rewards credit card. You need to meet or exceed the purchases requirement, otherwise you will not be qualified. 

• Sign up for online statements. Enroll to online statements, instead of paper statements. It is free and easy to use. Once you sign up, your bank will allow you to access your statement online when you log onto your account. This is a check in the box to meet one of the credit union’s requirements. Once you sign up for the first time, you’ll never have to do this again. There is nothing you need to do, unless you change it. 

• Use direct deposit/ACH or online bill pay. Can’t do a direct deposit, because your employer doesn’t have a deposit system? That’s ok because you can still use ACH. You can do an ACH transfer from another bank if you have another financial institution, which is normally free. But be mindful that some credit union’s requirement is that you need to meet or exceed a transfer of $500 or more per month. Some credit unions, however, may allow online bill pay as a substitute to qualify. I highly recommend online bill pay, because it is easy to use. If you have no bills to pay, pay anyone a small amount. Make a payment for a penny if they let you. The fine print mentions nothing about making a specific payment amount. You can also pay yourself by setting up a bill payment with your name and address. However, not all credit unions consider online bill pay as a direct deposit requirement, so it is important you look at your local credit union requirements and criteria. 

• Be active. Once you have activated your online account, log in at least once every month. Banks will not give you the special rate if you do not regularly use your online account. Why wouldn’t you login to your account? It is always a good idea to access your account at least once a month to monitor your spending and manage your account. There are infinite number of reasons why you should bank online. Plus, this is one requirement. 

Drawbacks

Although those reward checking account requirements are very easy to check off and activities you regulary do every month, some may find it difficult to achieve every month. It can especially do more harm than good when an individual looks at their reward checking account as a normal checking account, ultimately looking at their balance in their account to be spent. The biggest mistake some people may make when having one consolidated account is to spend whatever they have left in the account. If you see this account as a normal checking account and all the money in it is to be spent, it might not do you any good. Account holders who cannot help themselves from spoiling their checking account balance setups use automatic transfers for investments or savings accounts to restrict themselves and save money, but not everyone can or will do that. However, if you can mentally see it as your savings account, it will help you save, perhaps even more. If you manage your account well, treat it as a savings account, and pay your bills regularly. Then you shouldn’t have any problems.

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