NerdWallet’s Best Checking Accounts and Debit Cards, Spring 2012 Edition
Everyone’s talking about checking fees, but we’re totally over it. Contrary to what you may have heard, free checking isn’t a thing of the past. It’s alive and well at Internet banks, community banks and credit unions. In fact, many of these institutions offer better-than-free checking with interest or debit rewards. The only thing better than free checking is free money, right? If you’re new to the world of rewards checking, you’re in the perfect place. Here’s NerdWallet’s spring roundup of the best checking and debit rewards programs. We think you’ll be pleasantly surprised by what’s out there.
Best Debit Card Rewards Program: PerkStreet Financial
Debit cards with rewards may have gone the way of the dinosaur at big banks, but at PerkStreet, debit rewards are their specialty. While not as flashy as it used to be, the PerkStreet debit card still offers one of the best rewards programs in the business, with 1-5% back on all signature-based transactions. Here’s the full scoop:
- 5% back at rotating merchants that change every month, up to $5k spent annually
- 2% back at Amazon, iTunes, Target, Walmart and Best Buy when you shop online, up to $2,500 spent annually
- 2% back at those same retailers in-store if your account balance is more than $5,000, up to $2,500 spent annually
- 2% back when you and a friend use your PerkStreet cards together at the same restaurant, bar or coffee shop
- 1% back for every other signature-based purchase. PIN-based transactions don’t earn rewards.
PerkStreet previously offered 2% back on all signature-based purchases if your account balance exceeded $5k, and 1% back otherwise. We had a feeling that was too good to last, but even so, the current program is comparable to many rewards credit cards. And, regardless of your balance, you’ll never have to deal with monthly maintenance or debit usage fees. That alone makes the PerkStreet debit card leaps and bounds ahead of any prepaid debit card. Plus, if you’re traveling abroad, the foreign transaction fee is only 1% of your total purchase. That’s considerably better than the standard 3%.
Best Internet Checking Account: Ally Bank
Ally Bank’s Interest Checking account offers a winning combo of top-tier interest rates and complimentary services. Ally is an Internet-only bank, which allows them to offer some of the most competitive rates in the nation. Right now, you’ll earn 0.75% APY on balances of $15,000 or more, and 0.40% APY for balances less than $15,000. In addition to earning interest, this account has no minimum balance requirement and no monthly maintenance fees. It doesn’t even require a minimum opening deposit, making it perfect for all income levels.
The downside of a bank with no physical branches is you can’t speak to a customer service representative in person. However, if you’re comfortable speaking with people online or over the phone, we think you’ll find online banking extremely convenient. Ally’s customer service reps (real people, not a voicemail tree) are available 24 hours a day whenever you need them. Plus, you can use any ATM in the U.S. for free, and it’s pretty easy to deposit money via mail, electronic transfer, or even your home scanner using Ally’s eCheck Deposit program.
Best Credit Union Checking Account: Consumers Credit Union
Why join a credit union? Do it for yourself and your community. Credit unions are not-for-profit institutions owned by their members (you!), so you and your neighbors get a share of the profits in the form of reduced rates on loans and higher dividends. How much higher? How about 40+ times higher than the national bank average for interest checking? Consumers Credit Union in Illinois blows away the competition with their Free Rewards Checking account. It pays out an incredible 4.09% yield on the first $10,000, a better-than-usual 0.20% yield on balances between $10,000 and $25,000, and a still-pretty-darn-good 0.10% thereafter. Like most credit unions, Consumers does not charge monthly maintenance or debit fees.
Is there a catch? Sort of. To earn the high interest rate, you’ll need to use your account pretty frequently. Here’s what you’ll need to do each month:
- Make 12 signature-based debit card transactions
- Access online banking at least once
- Make one direct deposit or ACH debit, or pay one bill online with the Consumers Credit Union free online bill payment system
- Sign up for e-statements
Can’t meet all the requirements in any given month? Don’t worry. Your account is still completely free, but your interest rate falls to 0.01% APY. You’ve got nothing to lose and a whole lot to gain by signing up. Consumers Credit Union is open to anyone in the United States willing to donate $5 to the Consumers Cooperative Association, which is Consumers’ sponsor. Visit their website for more details.
| PerkStreet Financial℠ Debit MasterCard® | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
  |
| ||||||||||||
| |||||||||||||