2.25% High Yield Checking - FSCU

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inmymind
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2.25% High Yield Checking - FSCU

Postby inmymind » Sun Mar 19, 2017 9:47 am

I received a mailer about opening a checking account with First Service Credit Union. Here are the details:

2.25% APY for balances up to $20,000

To get that rate you have to do 3 things
1. Receive estatements
2. Have at least one direct deposit of $500 or more
3. Make at least 10 signature based transactions

I'm not interested in any new accounts at the moment, but thought it was a decent offer. I am not sure what the dollar spend for requirement #3 would be, but believe that would be the most inconvenient aspect of maintaining the account. If you don't meet all 3 requirements, the rate drops to a paltry 0.01% APY. Like everything, there is no free lunch.
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j0nnyg1984
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Re: 2.25% High Yield Checking - FSCU

Postby j0nnyg1984 » Sun Mar 19, 2017 6:42 pm

I would love to have one of these accounts, but the debit card activity is a deal breaker for me.

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nisiprius
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Re: 2.25% High Yield Checking - FSCU

Postby nisiprius » Sun Mar 19, 2017 7:03 pm

I had an account like that once, jumped through the hoops, all worked as advertised, I got the high rates. However, both the rates themselves and the maximum balance on which you got that rate declined. Within less than three years, it had gone from a very high rate on balances up to $50,000, to a competitive-but-nothing-to-write-home-about rate on balances up to $10,000.

2.25% on $20,000 is $450 a year. If you can jump through the hoops easily without disrupting your life, sure, why not? But don't expect it to last.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

Ron Ronnerson
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Re: 2.25% High Yield Checking - FSCU

Postby Ron Ronnerson » Sun Mar 19, 2017 7:32 pm

I'm a fan of credit union checking accounts. I earn 2.01% on balances up to $25k for a checking account at Provident Credit Union. The monthly requirements to get the rate: 1) make purchases of $300 or more using their debit or credit card, 2) make a direct deposit or ACH transfer, and 3) maintain enrollment in eDocuments. I've set up my auto/home/umbrella insurance with State Farm to charge onto my debit card automatically each month. I also have some funds automatically transfer into the account at the beginning of each month and automatically back out at the end of the month. They paid me a bonus of $150 to establish the account too. Now we're getting ready to open another checking account at Provident with my wife listed as the primary account holder to get 2.01% on another $25k.

inmymind wrote:If you don't meet all 3 requirements, the rate drops to a paltry 0.01% APY. Like everything, there is no free lunch.


Provident penalizes with the same 0.01% APY for not meeting their requirements. However, I don't have to do much of anything like make a certain number of charges on the debit card to earn the 2.01% they're paying. So perhaps the lunch is not free but it's pretty close to it since all the requirements are met automatically. There is no direct deposit required either as an ACH from Ally qualifies.

letsgobobby
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Re: 2.25% High Yield Checking - FSCU

Postby letsgobobby » Sun Mar 19, 2017 7:35 pm

we've had two accounts like this at two different credit unions for years. none of the rates have ever declined. We earn 2% on $15k at one and 2.25% on $20k on the other. very easy to meet criteria and a great way to keep an emergency fund.

vtMaps
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Re: 2.25% High Yield Checking - FSCU

Postby vtMaps » Sun Mar 19, 2017 7:52 pm

nisiprius wrote:2.25% on $20,000 is $450 a year. If you can jump through the hoops easily without disrupting your life, sure, why not? But don't expect it to last.

I see it as $250 per year because you can easily get 1% without jumping through any hoops. And all the money you spend with checks or debit cards is money that isn't earning 2% cash rewards on a credit card.

--vtMaps
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tbradnc
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Re: 2.25% High Yield Checking - FSCU

Postby tbradnc » Mon Mar 20, 2017 3:54 pm

Was going to bite despite the $500 monthly direct deposit requirement and received this:

Membership requirements show that you have to live or work in the Harris County or Waller County area of Texas.

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Kevin M
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Re: 2.25% High Yield Checking - FSCU

Postby Kevin M » Mon Mar 20, 2017 4:16 pm

I get 3% on $15K, which is the same $450/year as 2.25% on $20K. Like others, I have gone through several RCAs over the years, but the rate on this one has held since October 2011. Not sure if the balance cap has held that long, but it hasn't changed in the last few years we've been using it.

There are even higher rates with higher balance caps available, but they sometimes have requirements that are too onerous for me to bother with. Mine requires only 10 purchases and an ACH deposit of any amount (for me it's typically about $30/month)--you also have to log on four times, but you can link the account to Mint and get way more logins than that with no effort.

For anyone who's interested in these accounts, here's a good source to find RCAs at DepositAccounts.com: Reward Checking Account Rates.

vtMaps wrote:And all the money you spend with checks or debit cards is money that isn't earning 2% cash rewards on a credit card.

I spend about $30/month to get my 10 purchases, since I use it only for small purchases, which is $360/year. Two percent of $360 is only $7.20, so the loss of my 2% cash back lowers my effective rate to about 2.95%. Even if I spend $60/month it only lowers my effective rate to 2.90%. Still almost three times the 1% you get in a decent savings account.

Kevin
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flamesabers
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Re: 2.25% High Yield Checking - FSCU

Postby flamesabers » Mon Mar 20, 2017 4:23 pm

j0nnyg1984 wrote:I would love to have one of these accounts, but the debit card activity is a deal breaker for me.


In the past I would just make a bunch of small payments on my car insurance premium to meet the debit card activity requirement.

rocket354
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Re: 2.25% High Yield Checking - FSCU

Postby rocket354 » Mon Mar 20, 2017 4:43 pm

The requirements vary quite a bit from CU to CU. I use Baxter Credit Union. They do 2% up to $25k and 0.25% above that. Similar-sounding requirements as others, but the minutiae made all the difference to me:

1) Monthly direct deposit of >= $500
2) paperless billing
3) 15 "qualified" transactions/month: ACH, billpay, debit, credit, paying off credit card. Basically, any time someone draws from one of my accounts.

So by putting my bank-acount-only payments to draw from the account (Mortgages, HOA fees, credit cards, a couple utilities) I got to about 12 transactions/month "naturally." Then I put my internet bill ($20/mo) and cell phone (~$30/mo) onto their credit card, and pay it off. Voila, three more transactions for 15 total. Their CC is 1.5% cash back anyways, so I only lose 0.5% on $600/year, that is, $3, compared to a 2% cash back card.

They also do 2.5% savings, but those hurdles are too high for me to want to jump. I would not do those checking accounts that require 10/12/15 signature debit transactions per month as I'd probably come close to losing money overall compared with putting them on my 2% card and having a 0.01% checking account, not to mention the hassle of always having to scurry to try to meet the requirement.

patrick
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Re: 2.25% High Yield Checking - FSCU

Postby patrick » Mon Mar 20, 2017 5:42 pm

Lake Michigan Credit Union gives 3% on balances up to $15000 with similar requirements (but any direct deposit counts even if much smaller). This gives you the same total amount of interest ($450 per year) with a smaller deposit.

moneywise3
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Re: 2.25% High Yield Checking - FSCU

Postby moneywise3 » Tue Mar 21, 2017 12:34 am

Put your 20k in a long term CD, and spend more time with the kids.


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